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2016 (10) TMI 202 - ITAT MUMBAIExemption of long term capital gain under section 54 - whether the condition relating to "construction" of flat instead of condition relating to "buying" of the flat is applicable while allowing the exemption ? - Held that:- The assessee had sold the property on 04- 03-2011 and, therefore, as per section 54, the assessee was required to construct a new residential house by 04-03-2014 since section 54 allows exemption to an assessee of long term capital gain arising from sale of residential house if the amount of capital gain is invested in construction of new residential house within a period of 3 years. There is no specific requirement that assessee should also obtain the possession of the same within the period of three years. The emphasis is upon the utilization of the amount in purchase / construction of the new residential house. It is noted that undisputedly, the assessee invested a sum of ₹ 1,03,50,932 which was more than the capital gain earned by the assessee. In our opinion, the Ld.CIT(A) rightly drew support from the circular issued by the CBDT No.672 dt 16-12-1993. It is further noted by us that section 54 is a beneficial provision intending to provide benefits to the assessee with a view to boost investment in housing infrastructure. Thus, while interpreting such provisions, an effort should be made in the direction so as to find out how the benefit of deduction can be granted and not to find out how the same can be denied. In case the assesse has fulfilled the conditions in substance, then the benefit should not be denied on mere technicalities. In our view, the assessee has made compliance of the requisite conditions of section 54 and, therefore, the benefit has been rightly granted by The CIT. See CIT vs Hilla JB Wadia [1993 (3) TMI 7 - BOMBAY High Court] - Decided in favour of assessee.
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