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2013 (6) TMI 219 - AT - Income TaxExemption claimed u/s 54 denied - as per CIT(A) since the assessee has made payment for purchase of the plot from a different source and has no actually utilised the sale consideration received from transfer of the original asset - Held that:- As decided in Muneer Khan Versus ITO [2010 (8) TMI 752 - ITAT HYDERABAD] provision contained u/s. 54 is pari materia with S.54F. Therefore, following the aforesaid ratio laid down to hold that exemption claimed by the assessee under S.54 cannot be denied on the ground that the assessee has not utilised the sale consideration received from the sale of flats itself, in purchasing the plot. Law is well settled by the judicial precedents that investment in purchase of pot for construction of house would entitle an assessee to claim exemption u/s.54 or 54F. Board's circular No.667 dated 18.10.1993 also says so. In favour of assessee. Whether the assessee has constructed the residential house within a period of three years as stipulated in S.54 - Held that:- Neither the AO nor the CIT(A) has dealt this fact. While the CIT(A) has disallowed the claim of the assessee on the ground that the sale consideration received on transfer of assets has not been utilized in purchasing the plot, AO has disallowed it by observing that the assessee has not purchased a residential house within one year. It is categorical submission of assessee that the assessee has constructed the residential house within the stipulated period of three years as per S.54 and necessary information and evidences were also produced before AO with bank account and letters submitted. In the absence of any material to the contrary brought on record by the Revenue, inclined to accept the assessee's claim that the construction was completed within the stipulated period of three years as per Section 54. In favour of assessee. Method of computation of long term capital gains adopted by AO challenged - restriction of the cost of construction and cost of improvement to Rs.3 lakhs as against Rs. 6 lakhs claimed by the assessee - Held that:- As it is evident from the orders of the revenue authorities that the assessee has not produced enough supporting evidence to prove that she has in fact incurred expenditure of Rs.6 lakhs towards cost of construction and cost of improvement, the allowance of 50% of cost of construction at Rs.3 lakhs is reasonable, and no interference is called for. Against assessee. Disallowance of expenditure of digging of borewell while computing the cost of acquisition - Held that:- In the absence of any evidence in support of her claim in this behalf no infirmity in the action of the revenue authorities in rejecting the claim of the assessee. Against assessee. Disallowance of cost of boundary wall as part of construction cost of the new property - CIT(A) and AO have rejected the assessee's claim only on the ground that the construction made was not out of sale proceeds of the flats. Held that:- As for claiming exemption under S.54 it is not necessary that the investment in new asset should be out of the sale consideration received from transfer of the original asset only. Thus the assessee is entitled for deduction of Rs.3 lakhs, being expenditure incurred on construction of compound wall. In favour of assessee.
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