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2015 (1) TMI 1230 - AT - Income TaxDisallowance made u/s. 54 - assessee has not invested in purchase/construction of the new asset as stipulated u/s.54 and the construction of the new house started way back in the year 2002-03 - Held that:- Relevant provisions of section 54 makes it clear that the capital gain arising from the transfer of long term capital asset being the residential house is eligible for deduction under section 54 to the extent the same is invested or utilized during the specified period for purchase or construction of a residential house. There is however, nothing to show that such a residential house has to be only a new residential house and not a old residential house. Such a residential house is referred to as “the new asset” in clauses (i) and (ii) of sub-section(1) of section 54 in order to distinguish it from the similar expression “a residential house”, the transfer of which has given the rise to the capital gain used in the same provisions. What therefore is envisaged in section 54 for claiming deduction is the investment made in purchase or construction of residential house and not new residential house as interpreted by the A.O. As rightly held by the Ld. CIT(A), in this context, although there was an old structure on the plot of the assessee at Jubilee Hills which was demolished and the construction of new house had commenced way back in the year 2002-2003, the date of commencement of construction is not relevant for the purpose of deduction under section 54 and what is relevant is the date of completion of the construction as well as the period of investment made by the assessee in such construction. In this regard, there is no dispute that the amount in question spent by the assessee on construction of the residential house was within the specified period and that the construction of house was completed on 28.06.2010. As such, considering all the facts of the case, we are of the view that the assessee is eligible for deduction under section 54 to the extent allowed by the Ld. CIT(A) in both the years under consideration and we find no justifiable reason to interfere with the impugned orders of the Ld. CIT(A) on this issue. - Decided in favour of assessee
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