ITAT affirms lower sale consideration for capital gains, upholds exemption under S.54F despite construction timing. The ITAT affirmed the CIT(A)'s decision to adopt a lower sale consideration amount for computing capital gains and upheld the allowance of exemption under ...
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ITAT affirms lower sale consideration for capital gains, upholds exemption under S.54F despite construction timing.
The ITAT affirmed the CIT(A)'s decision to adopt a lower sale consideration amount for computing capital gains and upheld the allowance of exemption under S.54F of the Act, despite the new asset's construction preceding the sale of the capital asset. The ITAT emphasized the purchaser's statement and lack of contradictory evidence, supporting the decision. The ITAT ruled that the construction completion date, not the commencement date, is the relevant factor for claiming the deduction under S.54F. The Revenue's appeal was dismissed, and the ITAT's decision was pronounced on 28.5.2014.
Issues: Computation of capital gains assessable, claim for relief under S.54F of the Act.
Analysis: 1. The appeal by the Revenue concerns the computation of capital gains assessable and the claim of the assessee for relief under S.54F of the Act for the assessment year 2009-10. 2. The Revenue contested the direction to adopt the sale consideration at Rs.71,00,000 instead of Rs.1,01,00,000 and the allowance of exemption under S.54F, despite the construction of the new asset preceding the sale of the capital asset. 3. Despite adjournment, the assessee did not appear, leading to an ex-parte disposal of the appeal. 4. The Assessing Officer computed capital gains at Rs.1,01,00,000 based on the bank statement, rejecting the assessee's explanation regarding the additional amount received. The CIT(A) relied on the purchaser's statement and directed the adoption of Rs.71,00,000 as the sale consideration. 5. The Revenue challenged this decision, but the ITAT upheld the CIT(A)'s order, emphasizing the purchaser's statement and lack of contradictory evidence. 6. Regarding the deduction under S.54F, the Assessing Officer disallowed it as the asset was purchased before the sale. The CIT(A) allowed the deduction, noting that the construction completion date is the relevant factor, not the commencement date. 7. The ITAT concurred with the CIT(A), citing the absence of a requirement for construction commencement post-sale in S.54F and upheld the deduction eligibility, dismissing the Revenue's appeal. 8. The ITAT pronounced the order on 28.5.2014, affirming the dismissal of the Revenue's appeal.
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