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No Benefit Under Section 54F Can Be Denied For a Property’s Simple Lack of Construction: ITAT New Delhi

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The Income Tax Appellate Tribunal New Delhi ruled that no benefit under Section 54F can be denied for a property’s simple lack of construction.
The assessee is a resident of Kuwait & a doctor by profession. The Assessee in the year under consideration, sold a Plot of Land and earned LTCG , which was invested in the purchase and construction of a residential house and accordingly, deduction was claimed. 
The two member bench of B. R. R. Kumar, Accountant Member and Yogesh Kumar US, Judicial Member noted that the amounts for purchase of property and the construction thereon, were paid duly within the relevant period, as prescribed under law and that too from the Capital Gains Account. 
The bench observed that the said fact of the payments being made, has been admitted by the CIT(A), which is evident from the perusal of in para 5 .2.2 at Page 16 of his order . In such circumstances, the disallowance of the entire exemption only because the construction was not completed is without any basis and/or merit and the said action o f the Ld. CIT(A) deserves to be quashed. 
The tribunal held that the CIT(A) erred in disallowing the claim by making factually incorrect observations that the assessee had not deposited any amount in the capital gains scheme account whereas the amounts were duly deposited in the capital gains scheme account and duly utilized from the said account only. The CIT(A) further erred to even take cognizance of the capital gains account which was placed on record. 
Case title: Subramanian Swaminathan v/s ACIT(Intl. Taxation)
Citation: ITA No. 7904/Del/2018 : Asstt. Year: 2015-16 
Posted : 29/05/2023 12:09 am