Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 437 - ITAT AHMEDABADWorking of LTCG on sale of property - Claim of excess construction cost denied - HELD THAT:- we note that the assessee himself before the AO has agreed that he has claimed excessive construction cost by ₹ 2,50,000.00 only. - we do not find any reason to interfere in the finding of the AO. Thus, the ground of appeal of the assessee for claiming the deduction on account of the expenditure is dismissed. Deduction under the provisions of section 54 - Profit on sale of property used for residence - deduction was denied by the AO on the reasoning that the assessee was already in the possession of the residential house at the time of purchase of the new house - HELD THAT:- As we note the word used in section 54(1) of the Act reads as investment in ‘a residential’ property which ought to be interpreted as property in which investment should be of residential in nature in nature. As the word ‘a residential property’ should not understood in singular number or one residential property. In holding so, we find support and guidance from the judgment of Hon’ble Karnatka High Court in case of CIT vs. D. Ananda Basappa [2008 (10) TMI 99 - KARNATAKA HIGH COURT] The assessee cannot be denied the benefit of the deduction provided under section 54 of the Act if he has a house at the time of transfer of the property and makes the investment in another residential property. Accordingly, the finding of the authorities below is devoid of any merit. Likewise, the amount of capital gain is less than the amount of the investment made by the assessee in another residential house. Therefore, we are of the view that the assessee is eligible for deduction under the provisions of section 54 of the Act. Accordingly, we set aside the finding of the learned CIT-A and direct the AO to allow the benefit of deduction for making the investment in another residential unit of ₹ 12,50,000.00 only. Accordingly, there cannot be any addition to the total income of the assessee on account of capital gain as discussed above. Hence, the ground of appeal of the assessee is allowed.
|