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2021 (1) TMI 686 - AT - Income TaxRectification of mistake u/s 254 - Eligibility of exemption u/s.54F - HELD THAT:- We are concerned with the initial year when the assessee deposited the amount in capital gain account scheme. A categorical finding has been recorded that the assessee did deposit capital gain in specified capital gain account scheme. In that view of the matter, the assessee becomes entitled to exemption u/s.54F of the Act for the year under consideration - It is for the AO to examine as to whether the assessee has constructed the house within period of three years or not. In case the house is not so constructed or the other relevant conditions are not satisfied, then the AO becomes free to charge the amount of exemption earlier allowed as income u/s.45 of the third year. We, therefore, modify paras nos. 10 and 11 as under : “10. We have found it as an admitted position that the assessee deposited balance capital gain in the specified capital gain account scheme. This makes the assessee entitled to exemption u/s.54F in respect of the year under consideration. However, the AO is free to examine as to whether the assessee constructed the house within the stipulated period of three years. In case such construction is not done or the other relevant conditions are not satisfied, then the AO will be at liberty to invoke the proviso to section 54F and make suitable addition in the income of the assessee at the end of third year from the date of transfer of the original asset. Insofar as the year under consideration is concerned, the assessee is entitled to exemption because she has deposited the amount in the designated capital gain account scheme. 11. In the result, the appeal of the Revenue is dismissed.” Miscellaneous Application is allowed.
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