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2013 (7) TMI 957 - AT - Income TaxDenial of exemption claimed under sec. 54F - Held that:- On perusal of section 54F(1) and sub-section (4), it reveals that these sections do not put any restriction that only capital gain would be utilized for purchase of the new house. The law permits utilization of capital gain within the specified time, the assessee may use such funds for other purposes and may find resources from other source for investment in time. The section provides investment in a house prior to one year of the transfer of long term capital assets. It will make it clear that if the transfer has not taken place then from where the funds would come for making the investment. The investment must be from some other sources and when assessee would receive sales consideration on transfer of a long term capital assets, he will claim set off of the capital gains against the investment already made for the purpose of exemption under sec. 54F. Revenue Authorities have erred in holding that assessee is not entitled for exemption under sec. 54F(1) of the Income-tax Act, 1961 for a sum of ₹ 121,32,636. The investment of the assessee is more than the capital gain earned by him. Therefore, we allow the appeal of the assessee and delete the addition of ₹ 121,32,636 in the total income of the assessee under the head "long term capital gain".
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