TMI Blog2017 (9) TMI 1949X X X X Extracts X X X X X X X X Extracts X X X X ..... ration or demolition of the property is carried out by the assessee for the purposes of reconstruction after the demolition and for making it convenient for his use, then the cost incurred by the assessee for that purpose would not be eligible for deduction u/s.54F, is against the very purpose of providing this deduction in the statute book. Our reading of the provision makes it abundantly clear that the purchase do not include a purchase which is not a purchase of an asset which is not incapable of being used by the assessee. The assets for the purpose of Section of 54F should be an asset purchased by the assessee and if an assessee incurs a cost for making it useful and convenient after taking approval from the competent authority, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 2008-09 and sold the same to the assessee in the year 2010 and the building consisted of ground plus two floors, with granite flooring and all civic amenities as per the sale deed, hence the said property cannot be termed as not habitual and thus. required alterations in order to make it habitual. 4. The Ld. CIT(A) erred in not appreciating the fact that the AO has in fact allowed the LTCG invested by the assessee on purchase of a residential house consisting of Ground plus two floors amounting to ₹ 43,09,100/- (including Registration charges and Stamp duty paid) u/s 54F and it is only the balance amount of ₹ 55,89,182/- incurred over and above the purchase value of the new asset which has not been considered for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be deemed to be the cost of the new asset, while in the present case the assessee withdrew the entire deposits of ₹ 98,89,752/- from the capital gain account and invested only ₹ 43,09,100/- on purchase of the new asset and hence the balance amount is not eligible for deduction u/s 54F since the same was not deposited in the Capital Gains Account. 7. The Ld. CIT(A) erred in allowing the claim of the assessee u/s 54F to the extent of ₹ 55,89,182/- expended after the purchase of the new asset for the purpose of renovation and expansion in view of the Hon ble High Court of Kerala judgment in the case of Mrs. Meera Jacob v. ITO (ITA No.5 of 2006) dtd. 9.6.2008 and Mrs. Pushpa v. ITO (ITA Nos.30 32 of 2012) dtd. 22/8/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inced with the submission made by the assessee and had made the addition of ₹ 55,89,182/-. Feeling aggrieved, the assessee filed an appeal before the CIT (A). 03. The CIT (A) has granted relief to the assessee. Paragraphs 7 and 8 of the order of CIT (A), is reproduced hereunder : 7. The Hon ble Delhi High Court decision in the case of CIT v. Gita Diggal in ITA 1237/2011 dated 21/02/2013 has been cited and this reference helps the appellant case. 8. Accordingly, ₹ 32.50 lakh spent towards alteration and ₹ 23,00,000/- towards construction of 3rd floor are allowed as deduction u/s.54F. Similarly claim of ₹ 2 lakh towards brokerage expense is allowable. Feeling aggrieved by the above relief granted by the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where the assessee owns on the date of the transfer of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause, (a) or, as the case may be, clause (b), of sub-section (J) shall be deemed to be income chargeable under the head Capital gains relating to long-term capital assets of the previous year in which such new asset is transferred... 07. By relying upon Section 54F, the AO has noted that the assessee is not entitled to the deduction u/s.54F for the alteration / renovation carried out by him to the purchased unit, as also to the construction of the third floor. According to the AO it would amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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