Two ITAT decisions in favour of assessee: Self-occupied property and revised returnsThese are the two separate ITAT decisions that have provided relief to taxpayers.

Self-occupied property

Persons owning more than one property are assumed to earn ‘deemed rent’ from all properties (except one) and liable to pay tax on the same. One property can be designated as ‘self-occupied’ and no deemed rent is presumed for it. In a case before the Mumbai bench of the Income Tax Appellate Tribunal (ITAT), the assessee had claimed a property as self-occupied in his return but changed it to a different property during the assessment. The assessing officer did not allow this saying that an assessee cannot make any changes after selecting a house property as ‘self-occupied.’ However, the Mumbai bench of the ITAT disagreed with the AO, stating that the IT act nowhere states that the option of choosing a self-occupied property, once exercised, cannot be changed.

Revised Returns

Assessees are allowed to revise their returns within 12 months of the expiry of the relevant financial year or the completion of IT assessment, whichever is earlier. In a case before the ITAT, Mahesh Hinduja had filed an original return disclosing an income of Rs 4.91 lakh for the financial year 2010-11. After receiving a notice under Section 142(3) for scrutiny assessment, he filed a revised return disclosing an income of Rs 6.24 lakh and capital gains of Rs 50 lakh.

However, he claimed exemption on the capital gains under Section 54 of the Income Tax Act because he had invested the proceeds in a new residential property. The ITAT noted that the assessing authorities had accepted the higher revised income while denying the exemption claimed which was a very ‘selective approach.’ The Tribunal hence ruled in favour of the assessee and sent the matter back to the assessing authority for examining and allowing the deduction.

Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at