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2017 (9) TMI 961 - AT - Income TaxBenefit of deduction u/s 54F - construction of a residential house completion by the assessee - absence of completion certificate - whether the absence of deposit of unutilised net consideration in a specific bank account as is required u/s 54F(4)should the Assessee be denied the benefit of deduction u/s 54F of the Act? - Held that:- The construction of a residential house was completed by the assessee within the period of three years from the date of transfer as is required u/s 54F(1) of the Act. The absence of completion certificate cannot be a ground to deny the benefit of deduction u/s 54F of the Act. CIT vs Sardarmal Kothari (2008 (6) TMI 15 - MADRAS HIGH COURT) in the context of deduction u/s 54F of the Act came to the conclusion that it would be enough if the assessee establishes that he has invested the entire net consideration within the stipulated period. Hon’ble Karnataka High Court in the case of CIT, Bangalore vs K.Ramachandra Rao [2015 (4) TMI 620 - KARNATAKA HIGH COURT] held that if the assessee invests the entire consideration in construction of the residential house within three years from the date of transfer he cannot be denied deduction u/s 54F of the Act on the ground that he did not deposit the said amount in capital gain account scheme before the due date prescribed u/s 139(1) of the Act. As the assessee invested the sale consideration in construction of a residential house within three years from the date of transfer, we are of the view that the assessee should be given the benefit of deduction u/s 54F of the Act on the sum of ₹ 16,50,000/- also and cannot be denied the benefit the said benefit for the reason that he had not complied with the requirements of Sec.54F(4) of the Act. Thus in effect the assessee would be entitled to deduction u/s.54F of the Act of ₹ 20,31,839/- viz., for the investment of ₹ 3,50,000/- in purchase of the land, ₹ 31,839/- stamp duty and registration charges and ₹ 16,50,000/- utilised for construction of a residential house within this period specified in section 54F(1) of the Act. The AO is accordingly directed to allow deduction u/s 54F of the Act a sum of ₹ 20,31,839/-. Appeal of the assessee partly allowed.
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