Pre-amendment Section 54F allowed multiple residential units where timely construction was established despite plan deviations or incomplete bank records.

Under the pre-amendment section 54F applicable to Assessment Year 2009-10, investment in multiple residential units did not bar deduction because the later restriction to "one residential house" operated prospectively. Construction need not conform to an approved building plan, nor must statutory approval be produced, as section 54F requires construction within the prescribed period rather than plan compliance. A valuation report establishing timely construction could support the claim despite incomplete bank statements; any separate concern regarding the investment source could be examined under relevant provisions. The notes state that the corresponding addition was directed to be deleted.

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Issues: (i) Whether deduction under section 54F was allowable for investment in construction of multiple residential units under the pre-amendment law applicable to Assessment Year 2009-10; (ii) whether deviation from or absence of approval of the building plan justified denial of the deduction; and (iii) whether non-furnishing of complete bank statements justified rejection of the claim.

Issue (i): Allowability of deduction under section 54F for construction of multiple residential units under the pre-amendment provision.

Analysis: For Assessment Year 2009-10, the provision applicable was the pre-amendment version of section 54F, which referred to investment in "a residential house". The substitution of that expression by "one residential house" was prospective. The pre-amendment provision therefore did not restrict the deduction to investment in a single residential unit, and the principle applicable to section 54 was equally applicable to section 54F.

Conclusion: Deduction under section 54F could not be denied merely because the assessee constructed multiple residential units.

Issue (ii): Whether non-compliance with an approved building plan or deviation from the sanctioned plan prevented eligibility for deduction under section 54F.

Analysis: Section 54F requires construction of a residential house within the prescribed period but does not impose a condition that the construction must conform to an approved building plan or that approval from a statutory authority must be produced for claiming the deduction. The existence of the construction and compliance with the statutory time requirement were material.

Conclusion: Deviation from or absence of approval of the building plan was not a valid ground to deny deduction under section 54F.

Issue (iii): Whether failure to furnish complete bank statements evidencing utilisation of funds justified rejection of the deduction.

Analysis: The valuation report established that construction took place from November 2008 to July 2009, within the prescribed period, and its correctness was not disputed. Non-furnishing of complete bank statements could not, by itself, defeat the claim where the requisite investment within the prescribed period was established. Any independent doubt concerning the source of investment could be addressed under the relevant provisions of the Act.

Conclusion: The deduction could not be rejected merely for non-furnishing of complete bank statements.

Final Conclusion: The assessee satisfied the conditions for deduction under section 54F, and the corresponding addition was directed to be deleted.

Ratio Decidendi: Under the pre-amendment version of section 54F applicable to Assessment Year 2009-10, deduction is not restricted to a single residential unit, and the provision does not require approved building plans or complete bank statements where construction within the prescribed period is otherwise established.

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