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2014 (4) TMI 774 - AT - Income TaxDisallowing the exemption claimed u/s 54 of the Act - Rent from property and capital gains from sale of residential house - Held that:- The decision in Shri M.V. Subramanyeswara Reddy (HUF), Hyderabad [2014 (4) TMI 71 - ITAT HYDERABAD] followed The intention of the parties when the development agreement was entered into and the municipal permissions were obtained, which determine the nature of the property sought to be acquired, and subsequent change in the user of the property does not disentitle the assessee to relief under S.54 of the Act - Even though the property was subsequently leased out to M/s. APP Lab Technology P Ltd, and it has been used for non- residential purposes, the deduction u/s 54F cannot be denied - Mere nonresidential use subsequently would not render the property ineligible for benefit u/s 54F, if it is otherwise a residential property, as held in Mahavir Prasad Gupta Vs JCIT [2005 (10) TMI 231 - ITAT DELHI-G] - The Revenue authorities are not justified in denying the assessee the benefit of relief u/s 54 of the Act thus, the order of the CIT(A) set aside and the AO is directed for fresh examination and grant relief u/s 54 of the Act Decided in favour of Assessee.
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