9911796707
TMI Blog2012 (7) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... out indexed cost value of this property at Rs. 13,11,380/- and shown the long term capital gain of Rs. 21,88,628/-. The assessee claimed deduction u/s 54 of the Act on purchase/construction of new house property at Rs. 30,44,695/- and accordingly claimed tax payable on long term capital gain of Rs. 21,88,620/- at Rs. NIL. The assessee had invested a sum of Rs. 9,23,687/- for the purchase of residential plot and further invested a sum of Rs. 21,21,008/- in the construction of residential house. The residential plot was purchased by the assessee for a consideration of Rs. 9,23,687/- on 29.10.2005. This is 23 months before the date of transfer of capital assets. The assessee had also started construction of residential house before the transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2009 do not qualify for deduction u/s 54 and accordingly he disallowed the deduction u/s 54 as claimed by the assessee of Rs. 26,19,695/- (Rs. 9,23,687 + 16,96,008/-) and allowed deduction u/s 54 in view of construction of residential property to the extent of Rs. 4,25,000/- only as these payments were made after the transfer of capital assets i.e. 03.11.2007. 3. Aggrieved by this order of the A.O. the assessee went in appeal before ld. CIT(A) and filed detailed written submission before him which have been reproduced by the Ld. CIT(A) in his order in para 2.2. After taking into consideration these submissions of the assessee, ld. CIT(A) allowed the appeal of the assessee directing the A.O. to allow the deduction claimed u/s 54 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons laid down in section 54 are fulfilled in the case of the appellant. Accordingly, I am inclined to agree with the contention of the appellant that deduction u/s 54 be allowed to it. In this regard, the appellant has rightly placed reliance on the case of CIT v. Subramanyam Bhat (supra) wherein it is clearly held that for claiming deduction u/s 54 the construction of the house should be completed within the prescribed time limit of this section and date of commencement of construction is immaterial. The A.O. has tried to distinguish this case, however, in my considered view, this case has been distinguished on wrong assumptions. The A.O. had placed reliance on Smt. Shantaben P. Gandhi v. CIT reported at 129 ITR 218 (Guj.). However, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was completed within three years of transfer of capital asset, the ratio as laid down in the case of Subramaniya Bhat (supra) is applicable to the facts of this case as it has been clearly held in that case that for claiming deduction u/s 54, the construction of the house should be completed within the prescribed time limit and date of commencement of construction is not material for claiming deduction. 6. We further find that reliance placed by the A.O. on the decision of jurisdictional High Court in the case of Smt. Shantaben P. Gandhi (supra) was misplaced because the facts in that case are different from the facts of this case. In that case the construction of residential house was completed before the transfer of the capital asset ..... X X X X Extracts X X X X X X X X Extracts X X X X
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