TaxTMI 
TaxTMI 
2012 (11) TMI 907
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....nd are being disposed of by this common order for the sake of convenience. 2. The grievance of the assessee herein is with regard to non-granting of exemption u/s. 54F of the Income-tax Act, 1961. 3. Brief facts of the issue are that during the year, the assessee sold 505 square yards (sqy) out of 1516 sqy on 14.9.2005 and received sale consideration of Rs. 61,06,000. The assessee claimed deduction u/s. 54F on the capital gain of Rs. 38,03,881 as investment in house property. The Assessing Officer disallowed the above claim on the reason that the following work is pending in ground floor of the building: (i) Electrical work is partly completed, main door and other switch boards are yet to be fixed. (ii) Though ....
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....Kar.) xi. Mrs. Seetha Subramanian v. Asstt. CIT [1996] 59 ITD 94 (Mad.) 6. According to the assessee the assessee purchased old building of 53 years old constructed in the year 1953 and construction includes dismantling of walls, water proofing, wall finishes, plumbing, kitchen remodelling and furnishing the bedroom to make the house habitable. 7. Now we will look into the provisions of Section 54F. Section 54F speaks of capital gain on transfer of certain capital asset not to be charged in case of investment in residential house which reads as under: "(1) [Subject to the provisions of sub-section (4), where in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of ....
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....sfer of original asset constructed a residential house property within three years from the date of transfer of original asset constructed residential house property. 9. Subject to the fulfilment of the above three conditions, if the investment is more than net consideration, full capital gain is exempt, otherwise proportionate capital gain is exempt. The Department's contention is that the assessee had not constructed a new residential house property. On the other hand, the assessee has not constructed the new residential building within the stipulated time and it is in semi finished condition and as such the assessee is not eligible for deduction u/s. 54F. 10. In the case of Saleem Fazelbhoy (supra) it was held as follows: "The p....
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....f material used by the builder and, therefore, he may incur the expenditure on improvement of the house. Such expenditure cannot be equated with the expenditure on making the house habitable. Whether the house purchased by the assessee was in a habitable condition or not would depend on the state of condition of the house at the time of purchase. Hence, this aspect would have to be kept in mind while adjudicating such issue. In the present case, the AO as well as the learned CIT(A) had rejected the claim of the assessee on the ground that no expenditure could be considered for exemption under s. 54F which was incurred after the date of purchase. The AO had no occasion to examine the state of the condition of the house purchased by the asses....
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....nded by the legislature, the court may modify the language used by the legislature or even do some violence to it, so as to achieve the obvious intention of the legislature and produce a rational construction." 14. Further in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) it was held as under: "if the court finds that the language of a taxing provision is ambiguous or capable of more meanings than one, then the court has to adopt that interpretation which favours the assessee, more particularly so where the provision relates to the imposition of a penalty." 15. Coming to the facts of the present case, the assessee having constructed the building and invested the capital gain, the assessee is entitled for deductio....