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2012 (8) TMI 547 - AT - Income TaxLong term capital gain purchase of agriculture land denial of benefit of section 54F of the Act Held that:- There is no prohibition regarding construction of a residential house on agriculture land - house constructed on agricultural land or on other land does not matter, but the fact that house should be constructed and from the report it is very much clear that a residential house was constructed CBDT Cir. No. 667 has clarified that for the purpose of computing exemption u/s. 54 or 54F, the cost of the plot together with cost of the building will be considered as cost of new asset, provided the acquisition of the plot and also the construction thereon are completed within the period specified in these sections. Therefore, AO is not justified to disallow deduction u/s 54F - CIT was justified in allowing the claim of the house - appeal of the department is dismissed.
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