2021 (9) TMI 400 - ITAT BANGALORE - Income Tax

Head Note / Extract:
Deduction u/s. 54F - proportionate deduction - Denial of deduction as assessee has not completed the construction within the period of 3 years and accordingly directed the AO to quantify and allow the expenditure incurred by the assessee on the construction of new house u/s. 54F - main grievance of the assessee was that he has invested the net sale consideration received on transfer of capital asset in construction of new residential house, however, the house was not completed in full respect, on this reason, deduction u/s. 54F cannot be denied - HELD THAT:- In the present case, the assessee is entitled for proportionate deduction u/s. 54F to the extent of investment made in construction of new residential house within the period allowed u/s. 54F of the Act, i.e., 09.10.2014 though construction was not fully completed. The assessee shall provide necessary evidence in support of the cost of construction incurred upto the date of time allowed u/s. 54F of the Act so as to claim the deduction. This issue is therefore remitted to the Assessing Officer for the limited purpose of computation of deduction u/s. 54F of the Act, after examining the cost of construction incurred in construction of new residential house upto 09.10.2014. We may clarify that the investment made by the assessee before one year of sale of original capital asset i.e., before 11.10.2010 cannot be considered for grant of deduction u/s. 54F of the Act.