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2018 (12) TMI 756 - AT - Income TaxDeduction u/s 54F - taxability of capital gains on sale of capital asset - whether the capital gains required to be computed by applying section 50C or not? - Held that:- When the assessee has invested the entire net consideration in acquiring the new house. As per section 54F, the conditions required to be satisfied for allowing the deduction u/s 54F is firstly, the asset transferred must be long term capital asset not being a residential house. The assessee should acquire the new house within one year before the transfer or within 2 years from the date of transfer or the assessee required to construct one residential house before one year or within 3 years from the date of transfer. The quantum of allowable deduction is, if the cost of the new asset is not less than the net consideration in respect of the original house, the whole of such capital gains should not be charged u/s 54. From the above, the net consideration is the full value of consideration received or accrued as a result of transfer but not the deemed consideration as defined in section 50C of the Act. Section 54F(1)(a) clearly makes the assessee entitled for the net consideration, if the whole of such amount is paid for acquiring the new house. In the instant case, there is no dispute that the assessee has paid the whole of net consideration for acquiring the new house. On identical facts this Tribunal in the case of DCIT, Circle-2(1), Vijayawada Vs. Dr.Chalasani Mallikarjuna Rao [2016 (10) TMI 1032 - ITAT VISAKHAPATNAM] held that section 50C has no application in case the entire net sale consideration has been applied for acquiring the new house. - Decided in favour of assessee.
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