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2021 (8) TMI 461 - AT - Income TaxBenefit of exemption u/s. 54F - assessee has not invested the net consideration in the capital gain account scheme within the time stipulated for filing return of income u/s. 139(1) - HELD THAT:- We agree with the contention of the ld. AR that even though the assessee has not deposited the consideration received on sale of long term capital asset in the capital gain account scheme within the due date prescribed u/s. 139(1) of the Act, the assessee is entitled for exemption u/s. 54F of the Act if the assessee has invested the net consideration in accordance with the provisions of section 54F of the Act in acquiring or construction of new residential house. Therefore, the contention of the ld. DR that the assessee has not deposited the amount in the capital gain account scheme as stipulated and not entitled to the benefit of exemption, even though she has invested the money in construction of new residential house is not correct. Assessee invested in the construction of new house, not in her name but in the construction of new residential house in the name of spouse - This issue has already been decided in the case of P.R. Seshadri [2009 (7) TMI 814 - KARNATAKA HIGH COURT]and held that if the assessee invested the net sale consideration in the time allowed in construction of new house in the landed property owned by the assessee’s spouse, that will not disentitle the claim of deduction u/s. 54F. There should be direct nexus of investment by the assessee in the residential house owned by assessee’s spouse. In other words, if it was given for some other purpose to her husband and if there is no nexus between the these two, then exemption u/s. 54F cannot be granted. However, the lower authorities have not examined the exact amount of net consideration invested in the construction of new residential house and the time limit in which it was invested by the assessee. In our opinion, these facts are to be examined by the AO so as to grant deduction u/s. 54F. We are inclined to remit the issue to the file of the AO to verify whether the claim of amount invested in the construction of new house on the landed property owned by the assessee’s spouse has actually been invested therein - Appeal by the assessee is partly allowed for statistical purposes.
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