Chennai: A registered sale deed carries with it a formidable presumption of validity and genuineness. Registration is a solemn act that imparts a high degree of sanctity to the document, the Income Tax Appellate Tribunal (ITAT), Chennai, has said.The tribunal, comprising Aby T Varkey, judicial member, and S R Raghunatha, accountant member, made the observation while setting aside an order passed by an assessing officer who refused to accept a sale deed as proof of purchase of a flat and provide exemption of long-term capital gains from sale of a property and reinvestment into another residential property.The issue pertains to an appeal moved by Chandra Swaminathan, represented by her counsel R Vishnu Jayaram, challenging the assessment order passed against her income tax assessment for 2017-18. She sold her apartment by way of a registered sale deed for a valuable consideration, out of which a portion was received in cash and the balance through banking channels.The sale proceeds received from sale of flat, expensive imported household items, cash gifts were invested by her in purchasing a residential flat.Therefore, she claimed deduction under Section 54 (exemption on long-term capital gains) of the Income Tax Act on the ground that capital gain equivalent arising from transfer of her flat was re-invested in purchase of a new residential flat.Refusing her claim, the assessing officer (AO) rejected her claim and added the amount as unexplained money. His order was also confirmed by the Commissioner of income tax, prompting the petitioner to approach the tribunal.Allowing the appeal, the tribunal said: “The AO took high-handed action against the petitioner, and the additions were made without any basis. The AO has misdirected himself on irrelevant material; the case of the lower authorities was bereft of logic, fraught with conjectures and that the addition was unsustainable.”The tribunal further held that the petitioner had adduced the best evidence to prove the sale/purchase transactions to claim deduction.
