ITAT allows deduction under section 54F despite incomplete construction. Issue of unconfirmed loans remitted for fresh consideration. The ITAT allowed the deduction u/s. 54F to the assessee despite incomplete construction within the stipulated period, emphasizing the investment of the ...
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ITAT allows deduction under section 54F despite incomplete construction. Issue of unconfirmed loans remitted for fresh consideration.
The ITAT allowed the deduction u/s. 54F to the assessee despite incomplete construction within the stipulated period, emphasizing the investment of the entire net consideration within the specified time frame. The issue of unconfirmed loans under section 68 was remitted back to the AO for fresh consideration, directing the assessee to provide necessary evidence regarding the identity, genuineness, and creditworthiness of the lenders.
Issues: 1. Claim of deduction u/s. 54F for incomplete construction within the stipulated period. 2. Addition u/s. 68 regarding unconfirmed loans.
Issue 1: Claim of deduction u/s. 54F for incomplete construction within the stipulated period
The case involved the assessee who purchased land and started constructing a residential property but did not complete the building within three years. The AO denied the deduction u/s. 54F on this basis. The CIT(A) upheld the AO's decision. However, the ITAT held that the assessee had invested the sale consideration in construction within the stipulated period, entitling them to the deduction. Citing relevant judgments, the ITAT emphasized that completion and occupation of the house were not necessary; rather, the investment of the entire net consideration within the specified period was crucial. Relying on precedents, the ITAT directed the AO to allow the deduction u/s. 54F to the assessee, despite incomplete construction, remitting the issue for quantification.
The second issue pertained to the addition u/s. 68 of the Act concerning unconfirmed loans amounting to &8377; 38,85,074. The assessee had taken loans from various parties but failed to provide confirmation letters from lenders. Consequently, the AO made an addition, which was affirmed by the CIT(A). During the appeal, the assessee submitted that confirmation letters along with PAN were filed before the CIT(A). However, the ITAT noted the absence of a specific decision by the CIT(A) on this matter. Therefore, the ITAT remitted the issue back to the AO, instructing the assessee to furnish necessary evidence regarding the identity, genuineness, and creditworthiness of the lenders for fresh consideration.
In conclusion, the ITAT partially allowed the appeal for statistical purposes, granting the deduction u/s. 54F to the assessee despite incomplete construction within the stipulated period. Additionally, the ITAT remitted the issue of unconfirmed loans back to the AO for further examination and evidence submission.
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