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2020 (3) TMI 1226 - AT - Income TaxExemption u/s. 54F - Whether assessee could avail benefit u/s 54F if the construction of new asset commenced before the sale of old assets? - Whether the amount paid for land used for new asset should be considered for purpose of section 54F? - HELD THAT:- The condition preceded and for claiming benefit under the provision is that capital gain realised from sale of capital asset should have been invested either in purchasing a residential house or and constructing a residential house. In the present facts of case assessee utilised part of sale consideration earned from sale of 2 parcels of land in construction of residential house, which started on 13/01/2014 (which is within one year prior to the sale of capital asset) and, construction was completed in financial year 2016-17 (which is before expiry of 3 years from the sale of capital asset). Admittedly assessee has used sum towards construction of new asset and balance has been offered to tax. Under these circumstances, we do not find any violation of requirement to claim exemption u/s. 54F, as per decisions relied upon by Ld.AR in case of CIT vs J.R Subramanya Bhat [1986 (6) TMI 7 - KARNATAKA HIGH COURT] and CIT Vs. Ramachandra Rao [2015 (4) TMI 620 - KARNATAKA HIGH COURT] assessee is eligible to claim exemption under section 54F. We therefore direct Ld. AO is directed to compute the capital gains considering claim in consonance to decisions of Hon’ble Karnataka High Court mentioned herein. Whether additional deduction being construction cost incurred after filing the return of income but before expiry of 3 years from the date of sale of original assets land should be considered while computing exemption under section 54F even though assessee failed to claim it in the return of income? - HELD THAT:- It is observed that, as rightly argued by Ld. Sr. DR that, one has to verify the manner in which assessee invested in the vacant plot. Also, that this issue has not been considered by Ld.AO, and therefore in our view it is appropriate to set aside this issue back to Ld. AO. Needless to say, that assessee shall be granted proper opportunity of being represented in support of this claim. Accordingly, Additional ground raised by assessee stands allowed for statistical purposes,
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