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2019 (8) TMI 1259 - ITAT CHANDIGARHCorrect head of income - income earned from the sale of the property - ‘capital gains or ‘business income’ - HELD THAT:- In the case in hand, the assessee after sale of the land during the year under consideration had surplus money in his hand, which he invested in many small properties, out of which he had to resale six properties for the reason that the assessee was not expecting much gain from the said properties due to certain disputes / non preferred location etc. of these properties. However, rest of the properties have been retained by the assessee for long term. Merely because, the assessee had purchased many small properties that also itself is not good enough reason to hold that it was a business transaction. The quantum or number or number of investments i.e. whether the assessee invested in a single property or in many small properties to get better appreciation, does not change the nature of the investment to categorize it as business transaction. No justification on the part of the lower authorities in treating the income of the assessee from sale of property during the year as business income. The order of the lower authorities on this issue is set aside and the Assessing Officer is directed to treat the income from the sale of property as under the head ‘capital gain’. This issue is accordingly allowed in favour of the assessee. Deduction u/s 54F - amount spent for construction of residential house - assessee is owner of other commercial property - construction was not completed within three years - HELD THAT:- Except a share in the ancestral house in the property mentioned at S.No.4, the assessee did not possess any other residential property on the date of sale of the property and in view of above, the assessee has rightly claimed the deduction u/s 54/54F on construction of a residential house. So far as the rejection of the claim on the ground that the construction was not completed within three years from the date of sale of property is concerned, considering the beneficial provisions of this chapter intended to promote the construction of residential houses, and also considering the evidence furnished by the assessee of approved plan of municipal corporation regarding one single house constructed by the assessee, we do not find any justification on the part of the lower authorities in rejecting the claim of deduction on this ground. In view of this order of the lower authorities on this issue is set aside and the AO is directed to grant the deduction on account of construction of residential house under the relevant provisions of Section 54/54F. - Decided in favour of assessee.
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