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2009 (5) TMI 563 - AT - Income TaxExemption u/s 54F - Investment in additional construction in the existing property – Coownership of a property - AO disallowed the claim of ₹ 10,22,862 as exemption under s. 54F for the reason that the assessee was already owning a house on co-ownership basis and has only extended the property from the investment - It is assessee's claim that assessee's interest in the co-ownership property cannot be a basis to deny the benefit of s. 54F. Sec. 54F exempts tax on long-term capital gains arising from transfer of any long-term capital asset (not being a residential house) invested in a residential house. This exemption cannot be availed if there is a house in existence on the date of transfer. In the facts of the present case, I find that the assessee was the joint owner of the house property along with his brother on the date of transfer and he utilized the long-term capital gain for construction of additional floor in the same house. The Hon'ble jurisdictional High Court in the case of CIT vs. V. Pradeep Kumar & Ors. (2006 -TMI - 13259 - MADRAS High Court) has held that a mere extension of the existing building will not give benefit to the assessee under s. 54F of the Act. The case of the assessee clearly comes within the ken of the ratio of the aforesaid decision. - Decided in favor of Revenue.
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