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2021 (10) TMI 786 - AT - Income TaxDisallowance of exemption u/s 54F - villa was registered on 21.02.2015 i.e. prior to transfer of original asset i.e. 13.11.2015 - Also assessee has not paid for purchase of new residential house but it is for registration charges stamp duty charges and interior works - HELD THAT:- There is no strict requirement regarding completion of construction u/s 54F(1) to be entitled for availing exemption. The passport to derive benefit under sec. 54F(1) is investment in construction of property within the period required u/s. 54F(1) or to invest in residential property within the stipulated time for enabling deduction u/s 54F of the Act. Hon'ble Karnataka High Court in decision of CIT vs. Sambandam Udaykumar [2012 (3) TMI 80 - KARNATAKA HIGH COURT] took the view that, under provisions of section 54F of the Act, the condition preceded is that, capital gains realised from sale of capital asset should have been parted by assessee and invested or constructed a residential house, as the case may be. Hon'ble court also observed that, the essence of the purpose of section 54F, is whether, the assessee who received the capital gain has invested in a house. Once it is demonstrated that the consideration received on transfer of capital asset has been invested in or construction of residential house, even though the construction is not complete in all respect as required under law, assessee cannot be denied benefit u/s 54F. Respectfully applying ration of Hon'ble Karnataka High Court in case of CIT Vs. Sambandam [2012 (3) TMI 80 - KARNATAKA HIGH COURT] we hold that assessee is eligible during the year under consideration. However, the amount said to have been spent on interior decoration can't be granted since it is not for the purpose of making the house into habitats condition. see ALEEM FAZELBHOY. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-6 (1), MUMBAI. [2006 (6) TMI 139 - ITAT BOMBAY-G] - AO is directed to compute the proportionate deduction - Decided in favour of assessee partly.
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