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2016 (3) TMI 52 - AT - Income TaxAddition made under long term capital gain - claim u/s 54 denied - cost of acquisition considered by assessee rejected - determination of date of transfer - Held that:- The liberal interpretation of the term purchase as it appear in section 54 has to be given also to the term ‘constructs’ appearing therein, in conjunction to the former. Even the Hon’ble jurisdictional High Court in the case of CIT Vs Smt B.S.Shanthakumari [2015 (8) TMI 274 - KARNATAKA HIGH COURT ] held that completion of construction within three years period was not mandatory and what was necessary was that the construction should have commenced. There cannot be any dispute with the construction in the property for which agreement was entered by the assessee with Mrs Mary Susan had already began. In our view, the question whether the above agreement finally fructified is a different matter altogether. Assessee had in our opinion for all purposes satisfied the conditions u/s 54 of the IT Act, 1961, and earnestly demonstrated his intention to invest the capital gain in a residential house. We are therefore, of the considered opinion, that the assessee ought not have been denied the claim u/s 54 of the IT Act, 1961. The disallowance of such claim stands deleted. Since we have allowed the claim u/s 54 of the Act, the question of computation of cost of purchase of the property sold becomes academic. - Decided in favour of assessee
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