Tribunal grants full deduction under Section 54F, emphasizing eligibility based on property construction/purchase.

The Tribunal allowed the assessee's appeal regarding deduction U/s.54F of the Act, directing the AO to grant the deduction for the entire building constructed for residential purposes. This decision rendered the Revenue's appeal challenging the exemption granted U/s.54F groundless. The judgment emphasized the eligibility for deduction based on the construction/purchase of a residential property within the specified period, without consideration of its actual use by the assessee.

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Issues:
1. Assessee's appeal regarding deduction U/s.54F of the Act.
2. Revenue's appeal challenging the exemption granted U/s.54F of the Act.

Assessee's Appeal Analysis:
The assessee appealed against the order restricting the deduction U/s.54F of the Act from Rs. 3,38,76,455 to Rs. 2,10,76,603, excluding the portion of the residential building used for business purposes. The case involved the assessee, earning income from business and share trading, filing a return for the assessment year 2013-14. Initially processed under U/s.143(1), scrutiny under CASS led to an assessment under U/s.143(3) where the AO computed Long Term Capital Gain at Rs. 2,29,14,340, considering the building's value used for residential purpose only. On appeal, the CIT(A) found that a portion of the building was used for commercial purposes and granted a deduction of Rs. 2,10,77,603 U/s.54F, differing from both the AO's and assessee's calculations.

Revenue's Appeal Analysis:
The Revenue appealed against the CIT(A)'s decision to grant exemption U/s.54F of the Act. The brief facts highlighted the assessee's income sources and the assessment details. The CIT(A) proportionately calculated the value of the property used for residential purpose and allowed a deduction accordingly, leading to a revised Long Term Capital Gain amount. The assessee argued for the deduction on the entire building constructed for residential purposes, citing judicial precedents. The DR supported the AO's decision. The Tribunal analyzed Section 54F, emphasizing the requirement to construct/purchase a residential house within the stipulated time for claiming the deduction, irrespective of how the property is utilized. Citing judicial decisions, the Tribunal directed the AO to grant the deduction for the entire building constructed, disregarding its specific usage by the assessee.

In conclusion, the Tribunal allowed the assessee's appeal, directing the AO to grant the deduction for the entire building, rendering the Revenue's appeal groundless. The judgment highlighted the interpretation of Section 54F and the precedence set by judicial authorities, emphasizing the eligibility for deduction based on the construction/purchase of a residential property within the specified period, without consideration of its actual use by the assessee.

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