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2021 (8) TMI 220 - AT - Income TaxExemption u/s 54F - completion of construction or just investment - claim denied as assessee did not complete the construction of house within a period of three years albeit the construction work was going on - whether it is completion of construction or just investment of net consideration in construction which is sine qua non for granting exemption u/s 54F? - HELD THAT:- The requirement of section 54F is, inter-alia, to construct the residential house within a period of three years by investing the net consideration. The proviso to this section also states that the exemption shall not be allowed if the assessee constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset. So the emphasis in the provision is on constructing. Nowhere does the provision lay down a stipulation of completion of construction as a condition precedent for claiming the exemption. Once the construction has been started and the requisite amount has been invested in the same, the requirement of section 54F gets fulfilled notwithstanding the fact that the construction does not get completed within the given period of three years. On the facts of extant case, it is amply clear that the assessee invested ₹ 2.24 crores and odd in the construction of house within a period of three years, which construction was incomplete at the end of the stipulated period, but got actually completed at a later stage as has been recorded by the ld. CIT(A) on the last page of his order. It is further not disputed that the assessee invested a sum of ₹ 1 crore in the Capital Gains Scheme Account. We concur with the ld. CIT(A) in granting exemption u/s 54F - Decided in favour of assessee.
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