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2020 (12) TMI 1196 - AT - Income TaxRevision u/s 263 - LTCG - Assessee eligible for deduction u/s 54 - expenses incurred for furniture and Air Conditioners while constructing the residential house property - HELD THAT:- So far exercising of powers u/s 263 of the Act is concerned, we find no infirmity in the order of Ld. PCIT as the Assessing Officer has wrongly allowed the claim without examining that how much deduction can be allowed. Ld. Counsel for the assessee argued that this order could be rectified by the Assessing Officer u/s 154 of the Act. However Ld. Counsel for the assessee did not bring to our notice any such action being taken by the Assessing Officer. Hence on this ground revision of the order is justified. Adoption of the cost of acquisition of new asset - A residential house may have many other things, other than civil construction and including things like furniture and fixtures, as its integral part and may also be on sale as an integral deal. Further if these things are integral part of house being purchased, the cost of house has to essentially include the cost of these things as well. In such circumstances, what is to be treated as cost of the residential house is the entire cost of house and it cannot be open to the Assessing Officer to treat only the cost of only civil construction as cost of house and segregate the cost of other things as not eligible for deduction u/s 54. In this case it was not a composite deal, we find that the Ld. PCIT has also considered these case laws. However it is not clear whether the assessee had entered into with a contract with the contractor that included the cost of furniture and other fixtures. Ld. PCIT has also not brought any such evidence on record. Under these facts we modify the direction of Ld. PCIT to the extent that the Ld. Assessing Officer would allow the expenses incurred for furniture and Air Conditioners if it is part and parcel of the contract for construction of new house. This ground of the assessee is partly allowed.
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