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2018 (11) TMI 322 - AT - Income TaxReduction of assessee’s claim of deduction u/s 54 - housing loan of ₹ 50 lakh invested in purchase of new house excluded from the deduction claimed u/s 54 - reason for part disallowance as alleged utilisation of housing loan availed from Citi Bank towards purchase of new house - Held that:- From the material placed before me, it appears, the assessee along with others had purchased a new flat vide agreement dated 23rd September 2010. From the copy of the said agreement placed in the paper book it also appears that the total sale consideration of ₹ 2.50 crore was also paid to the vendors before or at the time of execution of the agreement. Thus, from the aforesaid facts available on record, prima–facie, it appears that the housing loan taken by the assessee was not utilised for purchase of the new house. On a plain interpretation of section 54(1) of the Act, it has to be concluded that if the assessee purchases a new house property one year before or two years after the date of transfer of original asset, it is entitled to claim deduction under section 54 of the Act irrespective of the fact whether money invested in purchase of new house property is out of the sale consideration received from transfer of original asset or not. The conditions of sub–section (2) of section 54 of the Act comes into play only in a situation where the assessee does not stick to the time limit provided under section 54(1) of the Act. Undisputedly, in the present case, the assessee has purchased the new house property within the stipulated period of two years from the date of transfer of original asset. That being the case, the assessee is eligible to avail deduction under section 54 of the Act. Accordingly, the Assessing Officer is directed to allow assessee’s claim of deduction under section 54(1) of the Act. - Decided in favour of assessee.
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