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2017 (5) TMI 1041 - AT - Income TaxNon-granting of exemption u/s.54 in respect of sale of the residential property - whether the assessee can be considered to have constructed or acdquired residential property within 3 years from the sale of residential property i.e. 21.06.2014? - Held that:- the present case, the assessee had already appropriated the capital gains for the purpose of construction of residential unit. However, construction was not completed within the stipulated period. In our opinion, liberal interpretation to be considered while granting exemption u/s.54 of the Act as it is a beneficial provision. The judgement in the case of CIT Vs. Smt. V.S.Shantha Kumari in (2015 (8) TMI 274 - KARNATAKA HIGH COURT ) wherein held that completion of construction within three years was not mandatory and was necessary was that the construction should be commenced. That cannot be disputed. When the commencement of the construction of the residential unit which is evidenced by construction agreement cited supra and also sale deed cited supra, in our opinion, assessee over and above satisfied the conditions laid down by Sec.54 of the Act and demonstrated his intention to invest the capital gains in residential house. In our opinion, assessee ought not to have denied the claim of deduction u/s.54 of the Act. Accordingly, we are of the opinion that the assessee is entitled for exemption u/s.54 - Decided in favour of assessee.
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