1985 (4) TMI 122

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....1. The construction commenced in July, 1971 and ended in April, 1973. The proceedings relate to the asst. yr. 1974-75, the accounting year for which ended on 31st March, 1974. The ITO held that the assessee was unable to explain the source of investment of the extent of Rs. 24,475 and, therefore, added this amount to the assessee's income. This was confirmed by the ld. AAC. 3. In appeal before us, the ld. counsel for the assessee contended that the construction of the house lasted during the period relevant to 3 asst. yrs. i.e., 1972-73, 1973-74 and 1975\4-75. The construction having been completed in April, 1973, the investment, if any, made during the accounting period relevant to the asst. yr. 1974-75 was only in respect of the work d....

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....y the assessee is about a sum of Rs. 24,575 brought to tax as capital gains arising from the sale of a house. The assessee sold the aforesaid house in two portions on the 15th and 16th March, 1974 for a total consideration of Rs. 95,000. The profit on the sale amounted to Rs. 25,525. The assessee claimed that since he had constructed another house, the amount of capital gain was exempt under s. 54 of the Act. It is admitted that the assessee constructed another house at 42-Id-gah hills, Bhopal and occupied it on 24th Oct., 1974. The claim for exemption was rejected on the ground that the assessee did not live in the house that was sold for two years. Sec. 54 provides that where a capital gain arises from the transfer of a capital asset, whi....