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2017 (6) TMI 439 - AT - Income TaxEligibility to relief u/s. 54 - disallowance on the ground that payment for purchase of new house property has not been made within one year from the date of transfer of original asset - Held that:- the provisions of section 54(1) allow purchase of new house within two years from the date of transfer of asset and hence the view taken by the Assessing Officer is not in accordance with the law and hence the same is liable to be quashed. Refereeing to the contention of the assessee that he had issued cheques on the date of agreement itself i.e. 26.7.2012, which is before the date of furnishing of return of income. However those cheques have been encashed by the builder belatedly and hence the assessee should not be penalized for that and that once cheques have been issued, assessee’s liability gets fulfilled and the same constitute utilization of sale proceeds of the old house, we find merit in the submissions of the assessee. There is not dispute that the assessee has issued cheques to the seller of house property on 26.7.2012, which is prior to the date of furnishing of return of income of the instant year. Accordingly, we are of the view that there is no requirement to comply with the provisions of section 54(2) of the Act in the facts and circumstances of the case. - Decided against revenue.
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