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2016 (5) TMI 1090 - AT - Income TaxEntitlement to exemption under Section 54E - Held that:- The capital gain computed by the assessee to the extent of ₹ 36,68,051/- on sale of 75% of his right in the immovable property was claimed exemption under Section 54E of the Act. The Assessing Officer found that what was deposited in IDBI bonds is only ₹ 15,00,000/-. Accordingly, he computed the exemption proportionately. It is obvious from the provisions of the Act that the assessee has to necessarily invest either in the capital asset or Capital Gains Bond as prescribed under Section 54E of the Act. For claiming exemption, the assessee has invested only ₹ 15,00,000/-. Therefore, the assessee is entitled for exemption proportionately. Accordingly, the CIT(Appeals) has rightly allowed the exemption proportionately. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed Computation of capital gains - Held that:- This Tribunal found that after the consideration received by the assessee, what was deposited in IDBI bonds within the prescribed time is only ₹ 15,00,000/-. Therefore, the Tribunal upholds the order of the Assessing Officer which proportionately allowed exemption under Section 54E of the Act. In this appeal, the CIT(Appeals) has further allowed 60% under Section 48(2) of the Act. The 60% might have been allowed for improvement, etc. made by the assessee to the property. Ultimately, the capital gains chargeable to tax was computed at ₹ 6,89,421/-. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
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