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2016 (2) TMI 507 - AT - Income TaxDisallowance of exemption of Capital Gains u/s 54 - exemption with respect to advance received as per the agreement to sell - sale deed was executed during the subsequent year - Held that:- We reject the conclusion of the ld. CIT (A) that agreement to sell is a mere start of the sale and cannot become the act of sale for section 54 of the Act. Moreover, it needs to be appreciated here that a hyper technical approach cannot be adopted to an incentive granting provision. Here is a case, where the assessee is a widow who has received advance in June 2005 against sale of her share and thereafter, purchased a residential property in August 2005, but yet exemption is not held eligible on the ground that the sale is in September 2006. According to the Revenue, had the sale deed be executed in August 2006, everything will be in order. We do not subscribe to such a pedantic application of the incentive provision. It was on account of such an approach, the Hon‘ble Apex Court in Sanjeev lal & Anr. Vs. CIT & Anr. (2014 (7) TMI 99 - SUPREME COURT ) has held as above. - Decided in favour of assessee Exemption claimed u/s 54 in respect of cost of construction of the new house in finishing the house - Held that:- Having regard to the evidence and payment having been made to discharge the said bill, in the absence of any evidence to the contrary, there is no justification to restrict the claim to ₹ 4 lakhs on estimate basis. In Saleem Fazelhoy v. DCIT (2006 (6) TMI 139 - ITAT BOMBAY-G ), it was held that expenditure incurred on making house habitable is considered as investment in purchase of house, and hence deduction u/s 54F of the Act is allowable. In the another case in Mrs. Gulshanbanoo vs. JCIT (2002 (1) TMI 1296 - ITAT MUMBAI), it was held that cost of new house for the purpose of section 54, include not only cost of purchase of new house but also includes other necessary expenditure to make house habitable. Ld. Counsel also relied on the Order of the Ahmedabad Bench in the case of Shri Srinivasa R. Desai [2014 (1) TMI 883 - ITAT AHMEDABAD]. The assessee after purchasing the flat has incurred further cost which are in the nature of cost of construction and it has been held that the cost so incurred will form an integral part of the qualifying investment under section 54 of the Act. In the light of the aforesaid case laws, the claim of the assessee stands allowed and we order accordingly. - Decided in favour of assessee
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