The Income Tax Appellate Tribunal (ITAT) delivered significant rulings across multiple benches during the week ending September 12, 2026. Key decisions included the ₹2.5 crore Section 54 exemption ruling for multiple property owners, cases involving digital evidence admissibility, and arm's length pricing determinations for international transactions. The tribunal also addressed unexplained cash deposit issues, tax regime processing errors, and joint property acquisition disputes during this period.
The Income Tax Appellate Tribunal (ITAT), Delhi has established a significant precedent for homeowners selling residential properties, ruling that owning multiple houses cannot automatically disqualify them from claiming Section 54 capital gains exemption. According to reports from Personal Finance News, the tribunal's order, pronounced on September 8, 2026, upheld the exemption claim of ₹52,32,567 for school teacher Pushpa Aggarwal from Saraswati Vihar, Delhi. The case involved a dispute dating back to Assessment Year 2017-18, where Aggarwal sold her residential property for ₹3,36,60,000 and invested the proceeds in a new house within the stipulated timeframe.
The case hinged on the fundamental difference between Section 54 and Section 54F of the Income-tax Act, 1961. As reported by Personal Finance News, Section 54 exempts capital gains when a residential house is sold and proceeds are reinvested in buying or constructing another residential house. In contrast, Section 54F, which covers cases where the sold asset is not a residential house, includes an additional condition that the taxpayer must not own more than one residential house on the date of transfer. The Commissioner of Income-tax (Appeals) at the National Faceless Appeal Centre, Delhi, held that the Section 54F rider cannot be read into Section 54, noting that 'the condition that one should not own more than one residential house at the time of sale of the original asset is not spelt out anywhere in section 54; the same is specifically spelt out in section 54F of the Act.'
According to the ITAT ruling, the CIT(A) order flagged important guardrails for home sellers. As reported by Personal Finance News, from April 1, 2023, Section 54-54F exemptions are capped at ₹10 crore. Additionally, from Assessment Year 2020-21, a taxpayer can invest in two residential houses if the capital gain does not exceed ₹2 crore, once in a lifetime. The tribunal noted that 'it is not the case of the revenue that the conditions available under Section 54 of the Act has not been satisfied' - the claim was rejected only because Aggarwal owned more than one residential property.
The ITAT's decision establishes that for most homeowners selling residential properties, owning multiple houses cannot, by itself, take away their Section 54 exemption. As reported by Personal Finance News, the tribunal found the CIT(A)'s view 'just and proper so as not to warrant interference,' dismissing the Revenue's appeal. The ruling is particularly relevant for homebuyers who have built up more than one house over the years, providing clarity on the application of Section 54 exemptions in cases involving multiple property ownership.
