1982 (4) TMI 84

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....ITO taxed Rs. 3,15,000 as short term capital gains. In the meantime the assessee had also started a construction of a bungalow for the purpose of his own residence and the total cost of that property upto 9th October 1976, according to the ITO, was Rs. 3,15,497. In the statement of computation of capital gains, however, the assessee's representative had given cost of construction of that property including cost of land at Rs. 3.36,403. 2. Before the ITO the assessee's case was that he became the owner of the property immediately on the death of his wife in 1972 and further that the flat was a long term capital asset as the period of occupation had to be considered from 1968 till it was sold in 1975. The ITO held that the flat was inherit....

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....n for deduction under s. 54 he held that even assuming that unrestricted ownership of the flat came to the assessee only in March, 1975, the assessee could not be denied of the exemption under s. 54 because that did not require the assessee to be the owner of the property when he was using it mainly for the purpose of his own residence. He, however, held that it was necessary to ascertain the exact expenditure in the house property whether it was constructed within a period of two years from the date of sale and whether it was being used by the assessee for the purpose of his own residence. Subject to this verification the assessee' s claim for deduction under s. 54 was allowed by him holding that the capital gains, if any, would be taxed a....