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2017 (9) TMI 1949 - AT - Income TaxDeduction u/s.54F - claim on ‘purchase’ or ‘construction’ of a residential house and not for ‘purchase & further construction/alteration’ of a residential house - whether alteration and additional construction of the residential house attracts deduction u/s 54F - as argued residential house purchased was not in a habitable condition - AO has noted that the assessee is not entitled to the deduction u/s.54F for the alteration / renovation carried out by him to the purchased unit, as also to the construction of the third floor - HELD THAT:- The word used ‘purchased’ is required to be restricted only to actual purchase and if any addition, alteration or demolition of the property is carried out by the assessee for the purposes of reconstruction after the demolition and for making it convenient for his use, then the cost incurred by the assessee for that purpose would not be eligible for deduction u/s.54F, is against the very purpose of providing this deduction in the statute book. Our reading of the provision makes it abundantly clear that the purchase do not include a purchase which is not a purchase of an asset which is not incapable of being used by the assessee. The assets for the purpose of Section of 54F should be an asset purchased by the assessee and if an assessee incurs a cost for making it useful and convenient after taking approval from the competent authority, as in the present case, then the assessee is entitled to deduction u/s.54F - there is no irregularity or illegality in the order passed by the CIT (A). - Decided in favour of assessee.
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