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1990 (1) TMI 118

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..... TAL : Rs. 1,67,900 ---------------------- There were some other charges and the total sale proceeds, therefore, amounted to Rs. 1,80,000. The Income-tax Officer was of the view that the property at Muzaffar Nagar was not self-occupied and had actually been rented out and so the provisions of section 54(1) were not attracted. The ITO also did not accept the plea of the assessee that the sale proceeds were utilised within the specified time and so capital gains was not exigible. The ITO also rejected the contention of the assessee that the newly constructed house was self-occupied. In fact, according to him, the new house acquired by the assessee atFaridabadwas also rented out. The ITO, therefore, proceeded to assess capital gains in the .....

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..... extended, to mean or include " parent-in-law ". On this ground alone, so ran the argument the assessee's claim for exemption of capital gains deserved to be rejected. It was also submitted that as per the certificate issued by the Estate Office, theFaridabadproperty was completed on22-6-1983which was beyond the period envisaged under section 54(1) of the Income-tax Act. The learned Departmental Representative emphasised that construction of the house property within a period of two years after the date of transfer meant completion of construction. According to him, this condition was also not fulfilled by the assessee in the instant case. His next contention was that the property constructed atFaridabadwas not for the purposes of the assess .....

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..... was started some time in January 1981 and was completed up to roof level up to21-11-1981. It was pointed out that the applied for the refund of security of Rs. 3,000 on24-11-1981. One Shri Naresh Kumar Madan, Inspector, visited the site on26-11-1981and the amount of Rs. 3,000 which was deposited as security was refunded by the Estate Officer,Faridabad. A sum of Rs. 88,041 was spent on the construction of the building up to roof level as on21-11-1981. Thus, the total expenditure made by the assessee including the cost of plot of Rs. 56,000 came to Rs. 1,44,041 as on21-11-1981. A further amount of Rs. 60,500 was spent in finishing the house up to15-3-1982and an amount of Rs. 1,500 on constructing a boundary wall and fixing a gate. Thus, the .....

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..... dwas constructed with the intention of using it for the assessee's own residence. It was emphasised that the expression " for the purposes of his own residence " did not include the word 'user' and the mere intention to have a house for one's own residence was enough to qualify for the benefit under section 54(1) of the Income-tax Act. Reliance was also placed on the decision of the Tribunal in the case of Damodar Raheja v. Eighth ITO [1984] 10 ITD 75 (Mad.) for the proposition that it is the object with which the purchase or construction is made that is relevant and not the actual subsequent user and even if subsequently the house property was let out the benefit could not be withdrawn. 6. We have carefully considered the rival submissio .....

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