Mr Tiwari from Panchkula sold his family’s ancestral agricultural land in the village for Rs 8 crore on September 18, 2017 and purchased two more properties in Chhat and Sanoli village and claimed Section 54B and Section 54F long term capital gains (LTCG) tax exemption. However, Mr Tiwari also owned a restaurant in Dhakoli where his office is also situated.
In his income tax return (ITR) Tiwari showed his LTCG at Rs 7.73 crore (after deducting some expenses) and claimed Rs 2.64 crore tax exemption under Section 54F (residential property) and Section 54B (agricultural property). However, during assessment, the Assessing Officer (AO) considered the supporting documents insufficient and disallowed Rs 2.64 crore under Section 54F and Rs 3.73 crore under Section 54B, resulting in an aggregate addition of approximately Rs 6.36 crore.
