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2015 (5) TMI 422 - AT - Income TaxDisallowance of exemption u/s 54F - assessee had purchased land on which construction was done subsequently - Held that:- The essence of the said provision is whether the assessee who received capital gains has invested in a residential house. Once it is demonstrated that the consideration received on transfer has been invested either in purchasing a residential house or in construction of a residential house even though the transactions are not complete in all respects and as required under the law, that would not disentitle the assessee from the said benefit. As relying on Commissioner of Income-tax Versus Sambandam Udaykumar [2012 (3) TMI 80 - KARNATAKA HIGH COURT] the disallowance made by the AO was rightly deleted by the ld CIT (A) as In the instant case, it is seen that the assessee had purchased land on which construction was done subsequently. CBDT Circular No. 667 dated 18.10.1993 states that the cost of land is an integral part of the cost of residential house and therefore if the amount of capital gain for the purposes of section 54F is appropriated towards purchase of plot and also towards construction of the residential house thereon then the aggregate cost should be considered for determining the quantum of deduction U/S 54F provided that the acquisition of plot and also the construction thereon are completed within the period specified in the section. The assessee purchased the land on 28.12.2007 and construction was undertaken on this land which was completed within a period of 3 years as required under the provisions of section 54F of the Act. - Decided in favour of assessee. Addition on account of share transaction - no details were filed during the assessment proceedings in respect of purchase and sale of shares and therefore the above amount was added back to the appellant's income as per AO - CIT(A) deleted the addition - Held that:- the purchase and sale of shares has been made through the bank account of the assessee, securities transactions tax has been paid on the transactions, all the payments have been made and received through cheque and the transactions have been confirmed by the brokers by way of the ledger accounts, the disallowance made by the AO was not justified, and therefore it was rightly deleted by the ld CIT (A). - Decided against revenue. Addition on payment made through credit card - business purpose - Held that:- We concur with the observation of the ld CIT (A) that in the absence of any findings or evidence on record to show that the expenditure was incurred by the assessee was for non business purposes and also in view of the fact that the payments have been made through cheques by the companies in which the assessee is a director and also in view of the fact that the above expenditure has been accepted by the department in the assessments of these companies in which the assessee is a director, the disallowance made by the AO is not based on facts and it cannot be said that the credit card expenses were not incurred on behalf of the companies for business purpose in which the assessee was a director. However the ld CIT(A) have considered the fact that some personal expenditure could also have been incurred by the assessee, so the disallowance made by the AO was rightly restricted to 5% of credit card expenses of ₹ 17,47,917/-. The remaining disallowance was rightly deleted by the ld CIT (A). - Decided against revenue.
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