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2013 (1) TMI 568 - AT - Income TaxExemption u/s. 54F - disallowance of claim as the advances were paid for the purpose of construction only after 31.07.2008 i.e., after the due date of filing the return - Any portion of the sale consideration was not deposited in the capital gain scheme account as mandated by sec. 54 within the stipulated time - Held that:- Admittedly, in this case the assessee purchased a property measuring 17 acres 47 cents along with the building for a consideration of Rs. 2.25 crores and also incurred expenditure of Rs. 21,37,800 towards registration charges. The assessee also claimed expenditure of Rs. 27,03,100 towards settling the claims of two persons viz., Sri J. Subramanyam Naidu and B.C. Reddappa Reddy. The fact of purchasing the above property cannot be disputed. This property was purchased through the High Court order from Official Liquidator. As DR produced a letter that the vital documents filed by the assessee are not available in the assessment folder. To that extent there is a contradiction between the AO and the CIT(A)'s order. These facts are to be examined. As the expression "residential house" used in section 54F has not been defined in the Income-tax Act. The popular meaning of the word "house" is a place or a building used for habitation of persons. Since a house is called residential house with reference to the purpose of its users, it may not be necessary that somebody should live in it continuously. It is enough if it was a house for residence. A farmhouse is also a residential house. Thus if the evidence brought on record by the assessee to show that there was a dwelling unit in the present property and the investment has been made by the assessee for construction or remodelling of the existing building as stipulated herein below the claim of the assessee has to be allowed - claim of the assessee cannot be rejected on any superficial ground that the assessee had not made investment within the time stipulated and the building constructed by the assessee is not a residential house - remit the issue back to the file of the AO who will examine the issue afresh in the light of the evidence brought on record by the assessee - Also the amount incurred by the assessee towards settling certain claims at Rs. 27,03,100 cannot be considered for deduction u/s. 54F as the new property acquired by the assessee is through the High Court order from Official Liquidator and thud unable to see any reason to incur such an amount - in favour of assessee for statistical purposes.
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