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2016 (8) TMI 597 - AT - Income TaxDeduction u/s. 54 - whether the claim for the exemption u/s. 54 can be denied for the reason that the construction of the house was not completed within the stipulated period or for the reason that the construction of the house started prior to the transfer of the capital asset? - Held that:- Hon’ble Supreme Court in the case of Fibre Boards (P.) Ltd., vs. CIT [2015 (8) TMI 482 - SUPREME COURT ] under sub-section (1), the assessee is given a period of three years after the date on which the transfer takes place to purchase new machinery or plant and acquire building or land or construct building for the purpose of his business in the said area. If the High Court is right, the assessee has to purchase and/or acquire machinery, plant, land and building within the same assessment year in which the transfer takes place. Further, the High Court has missed the key words “not utilized” in sub-section (2) which would show that it is enough that the capital gain made by the assessee should only be “utilized” by him in the assessment year in question for all or any of the purposes aforesaid, that is towards purchase and acquisition of plant and machinery, and land and building. Advances paid for the purpose of purchase and/or acquisition of the aforesaid assets would certainly amount to utilization by the assessee of the capital gains made by him for the purpose of purchasing and/or acquiring the aforesaid assets - Decided in favour of assessee
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