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2015 (5) TMI 712 - AT - Income TaxRevision u/s 263 - deduction under section 54F wrongly allowed - Held that:- The assessee had obtained the permission for construction of farm house on 21/12/006 for construction of 582 sq.meters. and subsequent to the approval, assessee incurred expenditure of ₹ 1.78 crore upto 31/03/2009. This shows that the said asset/residential house was pre-existing and not “a new asset” constructed/purchased within the period as laid down in Clause (a) & (b) of Sub-section 1 to Section 54 of the Act. It was further observed that the land on which the farm house was constructed for claim of deduction u/s.54F of the Act was purchased in 10/11/2004 and 26/08/2005 and also obtained construction approval in Decembner-2006, i.e. even before the purchase of land (original asset – purchased in October-2006 & February2007) which was sold during the previous year to generate long term capital gain. It was observed by the ld.CIT that as per provisions of section 54F of the Act if the residential house is constructed after the date on which transfer took place only then the deduction u/s.54 is allowable for construction of new asset, i.e. residential house. Further, even if the provisions of section 54F are considered to be applicable to extension of existing house under construction, the allowable claim of exemption has to be restricted to the extent of investment/expenditure incurred in the said residential house subsequent to the transfer of original capital asset under consideration. So far this reasoning is concerned, we find that the AO has allowed deduction without examining this aspect. Contention of the assessee is that the AO had raised a specific query in this regard and after considering the facts, submissions and case-laws allowed the deduction. But no such material is placed on record of this Tribunal that the AO during the course of hearing raised query with regard to claim of deduction of u/s.54 of the Act. Therefore, in the absence of such material, we do not see any infirmity into the finding of ld.CIT that AO failed to examine the aspect of allowability of deduction u/s.54F of the Act. After considering the totality of facts, we deem it appropriate to modify the order of ld.CIT on this issue and restore the issue of allowability of deduction u/s.54F of the Act to the file of AO for decision afresh. - Decided in favour of assesse for statistical purposes.
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