Section 54F

Capital gains under Income Tax Act 1961

Income Tax - Any Income derived from a Capital asset movable or immovable is taxable under the head Capital Gains under Income Tax Act 1961. The Capital Gains have been divided in two parts under Income Tax Act 1961. One is short term capital gain and other is long term capital gain....

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Is Allotment Letter Adequate enough for section 54F exemption

Income Tax - Whether The Allotment Letter Is Adequate Enough For Grant of Exemption U/S 54F of The Income Tax Act, 1961? Section 54F of the Income Tax Act, 1961 provides for exemption from tax on Capital gain on transfer of certain capital assets, in case of investment in residential house. While Section 54 grants relief from tax […]...

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Impetus to start-ups – a tax and regulatory perspective

Income Tax - In todays environment, start-ups are crucial as they focus on innovation, lead to employment generation and promote research and development. As per recent study conducted by IBM and Oxford, 90% of India’s start-ups fail within the first five years despite Indias entrepreneurial strengths....

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Government wants you to own a house

Income Tax - The government wants you to own a house and the same becomes evident from the various tax benefits allowed under the income tax laws to the persons who own a house. Let us understand the various beneficial tax provisions which prove that the government wants you to own a house....

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Section 54/54F- Cost of new residential house includes cost of land also!

Income Tax - This article aims to highlight the meaning of 'Cost of new residential house' in the context of deduction under section 54 of Income Tax Act. To resolve the controversy of claiming deduction under section 54/54F of the Act, 'cost of new residential property includes cost of land'....

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Clarify whether acquisition of residential flat in ‘OAS’ is ‘purchase’ or ‘construction: ICAI

Income Tax - Under Section 54 of the Income-tax Act, if an assessee who has earned a Capital Gain on sale of a residential house, has, within the prescribed period, purchased or constructed another residential house, then, to the extent of the cost of the new residential house, no tax in respect of such Capital Gain is payable. ...

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Clarify Section 54 and 54F – Capital gains exemption in case of investment in ONE residential house property in INDIA: ICAI

Income Tax - Section 54(1) has been amended by the Finance (No.2) Act, 2014 by substituting constructed, a residential house, with constructed, one residential house in India. Similar amendment is made in section 54F(1)....

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ICAI suggests Certification of deductions claimed U/s. 54, 54F, 54EC etc

Income Tax - At present deductions u/s 54, 54F, 54EC etc. are not subject to any audit or certification. The possibility that the assessee claims inaccurate amount of deduction under such provisions cannot be ruled out....

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Deduction u/s 54F cannot be denied if a person holding one more residential property in joint name

Shree Anil Dev Vs DCIT (ITAT Bangalore) - Disallowance of assessee's claim for deduction under section 54F on the ground of assessee holding one more residential property in joint name along with his wife, could not be sustained as although in purchase deed, name of assessee was also there along with name of wife and purchase consideration ...

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Deduction u/s 54F Not Eligible for Investment Made in two Differently Placed Properties

Omkar Chadha Vs ITO (ITAT Delhi) - The issue under consideration is whether the investment made in two different properties out of the capital gains is eligible for deduction u/s 54F?...

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Section 54F deduction cannot be denied for subsequent letting of property for commercial use

CIT Vs Ramesh Shroff (Madras High Court) - The issue under consideration is whether deduction u/s 54F can be denied for the reason that assessee had later on let out new property for commercial purpose to run restaurant?...

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Sale of Agricultural Land after Conversion is Taxable as Capital Gain

Ramesh Raj Bohra Vs DCIT (ITAT Jodhpur) - The issue under consideration is whether sale of agricultural land after conversion taxing under capital gain or under business income? ITAT direct the A.O. to treat the property on sale of land as capital gains and given the benefit of exemption claimed by the assessee U/s 54F of the Act....

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Section 54F: Vacant land cannot be treated as residential house

Dr. Devika Gunasheela Vs JCIT (ITAT Bangalore) - Dr. Devika Gunasheela Vs JCIT (ITAT Bangalore) The only basis on which the assessee was denied the benefit of deduction u/s 54F of the Act was that the assessee owned more than two residential houses, other than the new asset on the date of transfer of the original asset. From the order of assessmen...

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Govt Extends due dates under Income Tax Law & Benami laws

Notification No. 35/202-Income Tax [S.O. 2033(E)] and Press Release ID: 1634070 - (24/06/2020) - Vide Income Tax Notification No. 35/2020 dated 24.06.2020  govt extends  Due date for ITR for FY 2018-19  upto 31.07.2020, Last date for investments to be eligible for deduction under Chapter VI-A i.e. 80C, 80D etc for the FY 2019-20 [AY 2020-21] upto 31.07.2020, Last date for ITR for FY 2019-20 ...

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Recent Posts in "Section 54F"

Deduction u/s 54F cannot be denied if a person holding one more residential property in joint name

Shree Anil Dev Vs DCIT (ITAT Bangalore)

Disallowance of assessee's claim for deduction under section 54F on the ground of assessee holding one more residential property in joint name along with his wife, could not be sustained as although in purchase deed, name of assessee was also there along with name of wife and purchase consideration of second residential property was paid ...

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Deduction u/s 54F Not Eligible for Investment Made in two Differently Placed Properties

Omkar Chadha Vs ITO (ITAT Delhi)

The issue under consideration is whether the investment made in two different properties out of the capital gains is eligible for deduction u/s 54F?...

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Section 54F deduction cannot be denied for subsequent letting of property for commercial use

CIT Vs Ramesh Shroff (Madras High Court)

The issue under consideration is whether deduction u/s 54F can be denied for the reason that assessee had later on let out new property for commercial purpose to run restaurant?...

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Sale of Agricultural Land after Conversion is Taxable as Capital Gain

Ramesh Raj Bohra Vs DCIT (ITAT Jodhpur)

The issue under consideration is whether sale of agricultural land after conversion taxing under capital gain or under business income? ITAT direct the A.O. to treat the property on sale of land as capital gains and given the benefit of exemption claimed by the assessee U/s 54F of the Act....

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Capital gains under Income Tax Act 1961

Any Income derived from a Capital asset movable or immovable is taxable under the head Capital Gains under Income Tax Act 1961. The Capital Gains have been divided in two parts under Income Tax Act 1961. One is short term capital gain and other is long term capital gain....

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Section 54F: Vacant land cannot be treated as residential house

Dr. Devika Gunasheela Vs JCIT (ITAT Bangalore)

Dr. Devika Gunasheela Vs JCIT (ITAT Bangalore) The only basis on which the assessee was denied the benefit of deduction u/s 54F of the Act was that the assessee owned more than two residential houses, other than the new asset on the date of transfer of the original asset. From the order of assessment passed […]...

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Section 54 deduction allowed on Advance paid for Purchase of Property Prior to Sale of Old Capital Asset

Moturi Lakshmi Vs. ITO (Madras High Court)

The issue under consideration is whether the advance to the seller of flat prior to the date of sale of old capital asset will be eligible for claiming deduction u/s 54 under capital gains?...

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Investment on Renovation of New Residential House Eligible for section 54F Exemption

Juveria Begum Vs ITO (ITAT Hyderabad)

The issue under consideration is whether the investment made on renovation of new residential house is eligible for exemption u/s 54F?...

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Deeming Fiction of Sec 50C can’t be brought into Section 54/54F Exemption

Dhanveer Singh Gambhir Vs ITO (ITAT Indore)

The issue under consideration is whether the Section 50C need to be complied at the time of computation of exemption u/s 54 or 54F? ...

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Is Allotment Letter Adequate enough for section 54F exemption

Whether The Allotment Letter Is Adequate Enough For Grant of Exemption U/S 54F of The Income Tax Act, 1961? Section 54F of the Income Tax Act, 1961 provides for exemption from tax on Capital gain on transfer of certain capital assets, in case of investment in residential house. While Section 54 grants relief from tax […]...

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Section 54F Exemption on Investment in House Property in USA Prior to 01.04.2015 allowable

CIT Vs. Vinay Mishra (Karnataka High Court)

The issue under consideration is whether the assessee is entitled to claim exemption u/s 54F of the Income Tax Act in respect of investment made in the house property in USA? ...

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Purchased 4 Adjacent Residential Flats- Can Claim Exemption U/S 54F?

Mrs. Kamal Murlidhar Mokashi Vs. ITO (ITAT Pune)

Mrs. Kamal Murlidhar Mokashi Vs. ITO (ITAT Pune) Capital Gain-Purchased 4 Adjacent Residential Flats- Can Claim Exemption U/S 54F (With Provisions of Section 54F) In this article I will discuss some clarification (with the judgment of a recent case law) regarding the provisions of Section 54F i.e. Exemption from Capital Gain on purchase o...

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Section 54/54F- Purchase of under construction flat from builder- Purchase or Construction?

PCIT Vs Akshay Sobti (Delhi High Court)

The issue under consideration is whether agreement for construction of house interpreted as agreement for purchase for availing benefits of deduction u/s 54F if construction completed within three years?...

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Section 54F Exemption allowed Even if Residential Flats Constructed alongwith Saleable flats

Nisha Sarawgi Vs ACIT (ITAT Ranchi)

whether AO is correct in disallowing the exemption u/s 54F on the ground that residential flat was not constructed after the date of transfer and they were constructed alongwith saleable flats?...

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Deduction u/s 54F Allowed Even if Construction of New House Commenced Prior to Transfer of Asset

Natta Suryarao Vs ITO (ITAT Visakhapatnam)

The issue under consideration is whether the assessee would be entitled for deduction u/s 54F if construction of house is commenced prior to the transfer of the asset?...

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Impetus to start-ups – a tax and regulatory perspective

In todays environment, start-ups are crucial as they focus on innovation, lead to employment generation and promote research and development. As per recent study conducted by IBM and Oxford, 90% of India’s start-ups fail within the first five years despite Indias entrepreneurial strengths....

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Posted Under: Income Tax |

Section 54F exemption allowable before Intra Head Adjustment of Losses

Shri Naresh Jain Vs ACIT (ITAT Jaipur)

whether it is lawful to first compute capital gain after doing intra head adjustments and whether the deductions u/s 54F should be allowed from the net income computed after intra head adjustments?...

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Section 54F exemption on gain from House Constructed on own land

Rajesh Kumar Adukia Vs DCIT (ITAT Ranchi)

Whether A.O. is right in dismissing the claim of the assessee u/s. 54F of the Act on the ground that residential flat was not constructed after the date of transfer and they were constructed alongwith saleable flats?...

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Section 54F exemption cannot be denied for Home Loan default

Goulikar Jawaharlal Vs ITO (ITAT Hyderabad)

The issue under consideration is whether the default in home loan by the owner of the property can be the reason to disallow the capital gain deduction u/s 54F of the Income Tax Act, 1961?...

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Section 54F deduction restricted to only one residential property

Late Susan Cherian Vs ITO (ITAT Bangalore)

The issue under consideration is whether the capital gain deduction benefit is restricted to only one residential property under section 54F of the Income Tax Act?...

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A flat buyer acquire vested right in flat upon payment of consideration & execution of allotment letter

Yogesh Mavjibhai Gala Vs PCIT (ITAT Mumbai)

Yogesh Mavjibhai Gala Vs PCIT (ITAT Mumbai) A flat buyer acquire vested right in the flat upon payment of consideration and execution of allotment letter The holding period for the purpose of capital gain for income tax is calculated from the date of allotment of flat and not from the date of possession of flat. […]...

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Government wants you to own a house

The government wants you to own a house and the same becomes evident from the various tax benefits allowed under the income tax laws to the persons who own a house. Let us understand the various beneficial tax provisions which prove that the government wants you to own a house....

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Mere Expense on Electricity & Water bills won’t convert Status of Plot of Land into Residential Property

Shri Shailesh Kumar Chaturvedi Vs ITO (ITAT Jaipur)

The issue under consideration is whether the expense on electricity and water bill will convert the status of plot of land into residential property and accordingly assessee will be eligible for deduction u/s 54?...

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Section 54/54F- Cost of new residential house includes cost of land also!

This article aims to highlight the meaning of 'Cost of new residential house' in the context of deduction under section 54 of Income Tax Act. To resolve the controversy of claiming deduction under section 54/54F of the Act, 'cost of new residential property includes cost of land'....

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Section 54/54F exemption: ITAT directs AO to consider additional evidence

Hemalatha Mallapuram Vs ITO (ITAT Hyderabad)

The issue under consideration is whether the tribunal can give fresh opportunity to the assessee to submit evidence which assessee might not have been able to provide at the time of hearing?...

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Law Vs Case Law> Role of A Professional (CA & Lawyer) (Part II)

This is a supplement to the earlier published Article under the above Title (‘the earlier Article’). Law Vs Case Law Role of A Professional (CA And Lawyer)- Part I 1.The idea of acquiring and holding a ‘Unit’ in a building, with ‘ownership’ rights, – notwithstanding its peculiar characteristics, as distinct from an indep...

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Law Vs Case Law Role of A Professional (CA And Lawyer)- Part I

By and large,  clients engage CAs  for professional assistance, from the initial stage of preparing and filing tax return,  then during the assessment proceedings, and, thereafter, up to the second appeal stage of ITAT for representation....

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Prior to A.Y. 2015-16 word ‘a’ employed under Section 54 can include plural residential houses

Tilokchand & Sons Vs ITO (Madras High Court)

If the word 'a' as employed under Section 54 prior to its amendment and substitution by the words 'one' with effect from 01.04.2015 could not include plural units of residential houses, there was no need to amend the said provisions by Finance Act No.2 of 2014 with effect from 01.04.2015 which the Legislature specifically made it clear to...

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Check new deadlines to file ITR for FY20, FY19 & Other due dates

Vide Income Tax Notification No.35/2020 dated 24.06.2020 government extends various due date upto 31st July, 2020. The salient features of which are as under: 1) The time of filing of original as well as revised income tax returns of the FY 18-19 (AY 2019-20) has been extended to 31st July, 2020. 2) The returns of […]...

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Decoding ‘One House’, ‘One Unit’ Concept in Section 54F

Assesses wanting to claim exemption u/s 54F should ensure that there is unity of structure and they are indeed just independent units and not independent houses altogether that are located in different places....

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Govt Extends due dates under Income Tax Law & Benami laws

Notification No. 35/202-Income Tax [S.O. 2033(E)] and Press Release ID: 1634070 (24/06/2020)

Vide Income Tax Notification No. 35/2020 dated 24.06.2020  govt extends  Due date for ITR for FY 2018-19  upto 31.07.2020, Last date for investments to be eligible for deduction under Chapter VI-A i.e. 80C, 80D etc for the FY 2019-20 [AY 2020-21] upto 31.07.2020, Last date for ITR for FY 2019-20 [AY 2020-21] upto 30.11.2020, Last [&hel...

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Year of taxability of unutilised portion of capital gains- Section 54/54F

Deepak Bhardwaj Vs ITO (ITAT Delhi)

Deepak Bhardwaj Vs ITO (ITAT Delhi) Only question that arises for our consideration is whether the unutilised portion of capital gains is liable for tax either in the year in which such long term capital gains arose or in the year in which the period of 3 years for such utilisation expires. Under identical facts […]...

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Assessee can claim Section 54F deduction during Section 147 Proceedings

Pyare Lal Saini Vs ITO (ITAT Jaipur)

Whether AO is correct in rejecting the claim of assessee regarding the deduction u/s 54F, which was made first time during Reassessment Proceedings?...

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Date of possession as date of purchase of flat for Section 54F exemption allowed

Rajiv Madhok Vs ACIT (ITAT Delhi)

The contention of the assessee is that since final consideration was paid and the possession of flat was received within a period of one year prior to the date of transfer of capital asset, the same should be considered as the date of purchase. Whereas, the stand of Department is that the date of execution of agreement for purchase of fla...

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Exemption from Capital Gain Tax | Complete Guide

This article focuses on the exemptions available to an assessee from capital gain tax under Income Tax Act, 1961. Any profit or gain arising from Transfer of Capital Asset (long term or short term) shall be chargeable under the head capital gain in the year of transfer. However, there are some exemptions on such capital […]...

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Analysis of Exemptions Under Capital Gains

Profit on transfer of a capital asset is chargeable under the head Capital Gains. Section 45 makes the gains arising out of the transfer of a capital asset chargeable to tax under the provisions of the Income Tax Act, 1961. However, the chargeability has been subjected to the provisions of sections 54, 54B, 54D, 54E, […]...

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Section 54F – No disallowance for non Compliance of procedural requirement

Shri Kasi Viswanathan Ramnathan Vs ITO (ITAT Chennai)

Shri Kasi Viswanathan Ramnathan Vs ITO (ITAT Chennai) The issue under consideration is whether the denial of exemption under section 54F by CIT(A) is justified in law? In the present case, assessee has claimed the exemption u/s 54F in the return including the amount which had not been utilized before 31.07.2012. But later the assessee...

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Capital Gain tax payable on sale consideration receipt despite Release Deed at a later date

Shri I. Seshagiri Rao Vs ITO (ITAT Hyderabad)

Shri I. Seshagiri Rao Vs ITO (ITAT Hyderabad) The issue under consideration is whether the capital gains will be applicable where assessee signed a release deed waiving all his rights, title and interests in the property? During the assessment, the A.O. found that the assessee had entered into a release deed and also a supplementary [&hel...

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Section 54F: Reinvestment in name of wife allowed but not in the name of son

Sakharam Bhondve Vs ITO (ITAT Pune)

Sakharam Bhondve Vs ITO (ITAT Pune) The issue under consideration is whether the deduction u/s 54F for reinvestment against Capital gain in the name of wife and son will be allowed or not? As per the judgement of the Hon’ble Bombay High Court in the case of Kamal Wahal (supra): “It also noted that a […]...

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Aseesee can have both Trading & Investment Portfolio for Business Income & Capital Gain

DCIT Vs Niketan Krishorchandra Patel (ITAT Ahmedabad)

The issue under consideration is that whether the assessee having business of land trading can show capital gains from arising out of transfer of land and claim exemption u/s 54F?...

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Depereciable Assets U/S 50 and Benefit of Section 54EC/54F

Section 54, 54EC & 54F talks about the capital gain arising on transfer of long-term capital assets and one may note that depreciable assets if hold for a period of more than 36 months becomes a long-term capital assets. Section 54/54EC/54F are an independent sections & don’t make any distinction between Depreciable assets vis a vis Non...

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Section 54F Exemption allowable despite Non-Claim in Income Tax Return

Srinivas Bejgam Vs ACIT (ITAT Hyderabad)

Since S.54F of the Act is a beneficial provision and the Hon’ble Courts have held that the beneficial provision should be construed liberally, I deem it fit and proper to admit assessee’s claim of deduction u/s 54F of the Act and remand the issue to the file of the AO with a direction to consider the eligibility of the assessee for de...

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Exemption under Section 54 and Section 54F

There is always a doubt and confusion in the industry among professionals as well as tax payers regarding availment of exemption under section 54 and 54F against capital gains. Whether investment is allowed to be made only in one residential property or more than one residential property can be allowed? Therefore, today I am covering [&he...

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S. 54F Exemption if house construction not completed within 3 Years?

Mr. Sanghai had sold a commercial property, which was a long term asset and invested the same in purchase and construction of a flat in a apartment in Mumbai, within the one year of sale of asset and claimed deduction u/s 54F of income tax act, but later the builder has not completed the possession of the apartment within 3 years and the ...

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No Section 54F exemption on Sale value enhanced under Section 50C

Sunil Miglani Vs DCIT (ITAT Delhi)

It is pertinent to note that the Assessing Officer admitted the claim of the assessee for exemption u/s 54F(1)(b) in respect of investment on long term capital gain but instead of taking actual sale consideration received, has adopted the figure of sale consideration by invoking Section 50C. This is not in accordance with the provision of...

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Section 54F Capital Gain Tax Exemption

Article explains Circumstances to be fulfilled for availing exemption under section 54F,  What ‘Net Consideration’ means for Section 54F, Non-availability of exemption under section 54F, Amount of exemption available under section 54F, Circumstances under which Section 54F exemption would be withdrawn and Synopsis of the entire provi...

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Section 54/54F exemption eligible on investment in new property in Wife’s name

Shri Ramphal Hooda Vs ITO (ITAT Delhi)

Shri Ramphal Hooda Vs ITO (ITAT Delhi) Whether the exemption under Section 54F is extendable to the assessee for the total consideration paid by him, for the purchase of the new asset (the residential property) in the joint name or the exemption would be entitled to the extent of the share of the assessee in […]...

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Exemption available under section 54 of Income Tax Act

Section 54 of the Income Tax Act provides exemption towards ‘Long Term Capital Gain’ arising on sale of residential property. Under the current article, we would try to thoroughly understand the exemption available under section 54 of the Income Tax Act along with relevant frequently asked questions. Understanding the basis of ‘Capi...

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Section 54F exemption available despite investment in Spouse Name

A. Tamil Ponni Vs ITO (ITAT Chennai)

In the given case, the issue under consideration is if the new property has been invested in the name of assessees husband, then in such case whether the exemption under Section 54F can be denied to the assessee or not?...

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Leased property exceeding 12 year eligible for Section 54F exemption

Shri N. Ramaswamy Vs ITO (ITAT Chennai)

Shri N. Ramaswamy Vs ITO (ITAT Chennai) A bare reading of Section 2(47)(vi) of the Act shows that the agreement or arrangement which has the effect of transferring or enabling the enjoyment of immovable property, has to be considered as transfer in relation to capital asset. In this case, there was a perpetual lease agreement […]...

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Section 54F Exemption on residential house acquired abroad

Shri Rajasugumar Subramani Vs ITO (ITAT Bangalore)

Shri Rajasugumar Subramani Vs ITO (ITAT Bangalore) Provision in section 54F comes w.e.f. 01.04.2015 according to which it was clarified that the residential house is to be acquired only in India meaning thereby before this amendment it was not clear as to whether the benefit of section 54F can be given to residential house acquired [&hell...

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Section 54/54F Deduction cannot be denied for delay in construction by developer

Abodh Borar Vs ITO (ITAT Delhi)

The only issue in the appeal is the denial of deduction claimed by the assessee under section 54 and 54F of the Act. It is an undisputed fact that, firstly, the assessee has earned capital gain and has invested the same in purchase of a residential plot; secondly, the assessee has made a total investment of Rs.63,03,005/- which is more th...

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Ownership by registered deed not mandatory to claim section 54/54F exemption

Shri Basheer Noorullah Khan Vs CIT(A) (ITAT Bangalore)

Though assessee had not become owner of property in question because there was no registered sale deed executed by vendor, however, becoming the owner of the property in question was not required for the purpose of section 54/54F and, therefore, no deduction could be denied to assessee....

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Section 54F | Booking of bare shell of a flat | Construction or Purchase

ACIT Vs. Akshya Sobti (ITAT Delhi)

Booking of bare shell of a flat was a case of construction of house property and not purchase, and since construction had been completed within three years of sale of original asset, assessee was duly entitled to deduction under section 54....

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Unutilized amount in Capital Gain A/c can be withdrawn post Tax deduction

Prof. P. N. Shetty Vs ITO (Karnataka High Court)

Prof. P. N. Shetty Vs ITO (Karnataka High Court) If only a part of the amount deposited in the Capital Gains Account Scheme is utilized for the construction or purchase of a new asset within the specified time, income tax is chargeable on the unutilized amount. That is why the learned Single Judge, by the […]...

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Analysis of Section 54, 54EC and 54F- Exemption from Long Term Capital Gains

The persons having long-term capital gain can avail exemption under various sections by making prescribed investments. The long-term capital gains are usually taxed @ 20%. This tax can be saved by making investments as per section 54, 54EC and 54F. Section 54: Profit on sale of property used for residence: Capital gain arising on transfe...

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Section 54F Deduction cannot be denied for mere non deposit of amount in bank a/c

Nandkishore Ramanlal Parikh- HUF Vs ITO (ITAT Ahmedabad)

Where assessee did not deposit sale consideration in the bank account maintained under the capital gains scheme before the due date of filing of return but otherwise purchased new house within two years, as stipulated in section 54F(1), then deduction under section 54F could not be denied to assessee....

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Assessment not valid if AO fails to consider deduction/exemption claimed

Sri Deepak Dhanaraj Vs ITO (Karnataka High Court)

Sri Deepak Dhanaraj Vs ITO (Karnataka High Court) In this case AO has not whispered about the revised return filed by the assessee except observing that the returns filed by the assessee were invalidated being defective returns. If that being the position, no opportunity was provided to the petitioner under section 139(9) of the Act [&hel...

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AO cannot reject Section 54 exemption if amount was deposited in capital gain deposit account

Dr. Jaya Narayan Naik Vs JCIT (ITAT Ranchi)

whether AO is correct in holding that the assessee was not entitled exemption u/s.54 of the Act by rejecting the claim of the assessee to have deposited in capital gain deposit account?...

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Section 54F | Computation of holding period | Allotment date or Possession date

Nilam R. Kataria Vs ACIT (OSD) (ITAT Ahmedabad)

From ‘date of allotment’ of capital asset, i.e., 15-2-2007 the holding period was more than 36 months on sale of property on 4-8-2010 as such, revenue authorities were not justified in treating the holding period from date of registration of property, i.e., 30-9-2009 and treating it as short-term capital gains, deduction under section...

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Section 54F: ITAT allows Date of possession of new house instead of date of sale agreement / registration

Ayushi Patni Vs DCIT (ITAT Pune)

 Since final consideration was paid and the possession of flat was received within a period of one year prior to the date of transfer of capital asset, then the same should be considered as the date of purchase, so as to allow the benefit of deduction under section 54F to assessee....

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Section 54/54F: New residential house need not be purchased by assessee in his own name

Mrs. A. Vijayakumari Vs ITO (ITAT Chennai)

Mrs. A. Vijayakumari Vs ITO (ITAT Chennai) The provisions of section 54 of the Act are beneficial and are to be considered liberally for reasonable bonafide cause but investment in residential property is mandatory which is not in dispute in this case. The Assessing Officer was not justified in rejecting the case law relied on […]...

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Section 54F exemption cannot be denied merely because bills & vouchers were not produced

Shri Govind Gangadhar Sabane Vs The Income Tax Officer (ITAT Pune)

Shri Govind Gangadhar Sabane Vs ITO (ITAT Pune) There is no dispute to the fact that one capital asset was sold and thereafter, new house was constructed. That both the Revenue Authorities in their respective orders have agreed that the Inspector had visited the site and has reported that residential house has been constructed consisting ...

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Section 54F | Holding period | Computation from allotment or possession date

ITO Vs Smt. Meeta Bhavesh Ganatra (ITAT Mumbai)

 As allotment of property was final and payment of purchase consideration had been duly made before allotment, therefore, holding period of property had to be computed from the date of allotment, and not from the date of taking delivery of possession which was only a follow-up action....

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Temporary /makeshift superstructure not eligible for Section 54F exemption

Shri Harshad M Thakkar (Gandhi) Vs DCIT (ITAT Ahmedabad)

Shri Harshad M Thakkar (Gandhi) Vs DCIT (ITAT Ahmedabad) We are at loss to understand as to how the factual aspects like lack of basic amenity and a non-descript temporary makeshift shelter/ superstructure of insignificant worth can convert a land into a residential house. The vast open land with naturally grown grass, a grossly asymmetri...

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Section 54F deduction cannot be restricted to stamp duty value

I.T.O. Vs Shri Roop Narayan Sharma (ITAT Jaipur)

Deduction U/s 54F was available to assessee in respect of full value of consideration received and not on the value taken by the Sub-Registrar for the purposes of stamp duty. ...

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Section 54F Exemption cannot be denied if assessee invests entire consideration in construction of residential house

Vijay Mahipal v. ITO (ITAT Kolkata)

Vijay Mahipal v. ITO (ITAT Kolkata) If the assessee invests the entire consideration in construction of the residential house within three years from the date of transfer he cannot be denied deduction u/s 54F of the Act on the ground that he did not deposit the said amount in capital gain account scheme before the […]...

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Section 54F exemption if Sale Proceed not invested in Specified Govt Scheme but Property purchased within Three Years

Sh. Vijay Chaudhary Vs ITO (ITAT Delhi)

Sh. Vijay Chaudhary Vs ITO (ITAT Delhi) Whether the assessee invests the entire sales consideration in construction of a residential house within three years from the date of transfer can he be denied exemption under Section 54F on the ground that he did not deposit the said amount in capital gains account scheme before the […]...

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CIT(A) cannot enhance income based on sources not considered during assessment

Hari Mohan Sharma Vs ACIT (ITAT Delhi)

Enhancement u/s 251 (1) (a) is prohibited on the issues which have not at all been considered by AO during assessment proceedings, therefore, CIT (A) had exceeded his jurisdiction in enhancing the income of assessee by considering the new sources of income not at all considered by AO....

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No Deduction u/s 54B /54F if sale deed was unregistered and payment was in cash

Shri Ram Narayan Vs ITO (ITAT Jaipur)

Shri Ram Narayan Vs ITO (ITAT Jaipur) Conclusion: Since assessee purchased land through an agreement to sale which was unregistered and the payment was made in cash, therefore, in absence of sale deed, the unregistered agreement would not transfer any title to assessee of the agricultural land, accordingly, the claim of deduction under se...

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Section 54F Unutilized capital gain taxable as income u/s 45 after 3 Years

Prof. P.N. Shetty Vs ITO (Karnataka High Court)

Unutilized capital gain amount under Section 54 F[4] had to be charged under Section 45 as income of the previous year, after the expiry of three years from the date of sale of the capital asset as per proviso appended to Section 54F[4] and withdrawal of amount was permitted subject to deduction of tax....

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Sec 54F date of agreement to sell can be considered as date of transfer 

Kishorbhai Harjibhai Patel Vs ITO (Gujarat High Court)

Once an agreement to sell is executed in favour of some person, the  said person gets a right to get the property transferred in his  favour and, consequently, some right of the vendor is extinguished. Therefore, the agreement to sell which had been executed on 13th August 2010 was considered as the date on which the property, i.e. the ...

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For Section 54 exemption compute holding period from asset acquisition date

ACIT Vs Sandeep U Mehta (ITAT Mumbai)

Assessee was entitled to exemption under section 54 on long term capital gain on sale of properties as the holding period of the asset should be considered from the date of acquisition of asset in the light of agreement to sale, but not from the date of possession of the property....

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Section 54F deduction on cost of additional floors on new house

Shri Ramakrishna Aswatgh Vs ITO (ITAT Bangalore)

Shri Ramakrishna Aswatgh Vs ITO (ITAT Bangalore) In the present case, new house was purchased and the construction of additional floors was on such new house purchased by the assessee and this new house building purchased by the assessee has been accepted as eligible for deduction u/s. 54F. FULL TEXT OF THE ITAT JUDGEMENT This appeal [&h...

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Section 54F exemption allowable if construction completes within a period of three years from the date of transfer of original asset

Shri Sohanlal Mohanlal Bhandari Vs ACIT (ITAT Pune)

Shri Sohanlal Mohanlal Bhandari Vs ACIT (ITAT Pune) Adverting to the facts of the instant case, it is seen from pages 5 and 6 of the impugned order that the assessee acquired land in two parts for construction of a new residential house, viz, the first part of the plot purchased on 11.10.2010 and the […]...

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Section 54F Exemption without evidence of Agreement & Payment not allowable

Smt. Archana Kanwar Vs ITO (ITAT Chennai)

Smt. Archana Kanwar Vs ITO (ITAT Chennai) We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. During the previous year relevant to the assessment year 2012-13, the assessee sold a vacant plot at Gurgaon, Haryana for a consideration of ₹.75,00,000/- after reducing the ...

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Cost of Land is part of Construction Cost of House to avail Section 54F Exemption

Smt. Yoga Sikka (UPPAl) Vs ITO (ITAT Delhi)

Smt. Yoga Sikka Vs ITO (ITAT Delhi) There is no dispute that the assessee has invested the full sale consideration received on the sale of jewellery in the purchase of the plot of land. It is also not in dispute that before the lower authorities the assessee could not adduce any evidence. The certificate from […]...

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Exemption U/s. 54F available on capital gain on sale of depreciable assets

Income Tax Officer Vs Smt. Jaya Deepak Bhavnani (ITAT Mumbai)

ITO Vs Smt. Jaya Deepak Bhavnani (ITAT Mumbai) Legal fiction created in Section 50 is to deem capital gain as short term capital gain and not to deem an asset as short term capital asset and therefore it cannot be said that Section 50 converts long term capital asset into short term capital asset and […]...

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Section 54/54F :Tenancy right cannot be equated with ownership rights

Kaushik D. Mistry Vs ITO (ITAT Mumbai)

Kaushik D. Mistry Vs ITO (ITAT Mumbai) So far as the question of deduction u/s 54 is concerned, we find that the assessee has not acquired the ownership rights in the new property but merely acquired tenancy right which could not be equated with ownership rights. The conditions of Section 54 as well as Section […]...

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Section 54F of the Income Tax Act, 1961

Section 54F  of the Income Tax Act 1. Assessee is an Individual or HUF. 2. Capital Gain arises from the Sale of any capital asset other than Residential House. 3. This asset is called original asset. 4. Assessee has purchased a Residential House within a year before the date of transfer or constructed a residential […]...

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Exemption u/s 54F allowable despite start of construction of new house before sale date of original asset

Kapil Kumar Agarwal Vs DCIT (ITAT Delhi)

Exemption u/s 54F allowable despite start construction new house before sale date original asset...

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No Penalty for mere rejection of Sec 54F claim against tenancy right Sale

PCIT Vs Rasiklal M. Parikh (Bombay High Court)

The dispute between the Assessee and the Revenue was with reference to actual payment for purchase of the flat and whether when the Assessee had purchased one more flat, though contagious, could the Assessee claim exemption under Section 54F of the Act. ...

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Date of possession of flat is date of actual purchase for claiming exemption u/s 54F

Ayushi Patni Vs DCIT (ITAT Pune)

Ayushi Patni Vs DCIT (ITAT Pune) Whether the assessee is eligible for claiming exemption u/s 54F in respect of residential flat / house for which the assessee has entered into an agreement for purchase more than one year before the date of transfer of capital asset? The dates qua, transfer of capital asset, execution of […]...

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Exemption U/s. 54F cannot be denied for Purchase of Plot in HUF name

Kanaiyalal Muljibhai Patel Vs ITO (ITAT Ahmedabad)

Kanaiyalal Muljibhai Patel Vs ITO (ITAT Ahmedabad) The issue before us is, whether the house constructed by the assessee on a plot purchased in the name of HUF, exemption under section 54F, is available to the assessee or not ? The Revenue is of the opinion that for claiming exemption under section 54F, the investment ought […]...

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CIT (A) justified in directing AO to examine issue of deduction U/s. 54F

Ms. Zeba Shereen Vs ITO (ITAT Bangalore)

Learned DR submitted that the AO has failed to examine the claim for deduction under section 54F of the Act during the course of assessment proceedings as required by the law. Accordingly, the learned DR submitted that the revision order passed by the learned CIT does not call for any interference. ...

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Exemption U/s. 54F allowed for Investment in purchase of Villa routed through mutual funds

ACIT Vs Shri. Sunil Bandacharya Joshi (ITAT Bengaluru)

ACIT Vs Shri. Sunil Bandacharya Joshi (ITAT Bengaluru) In the present case, the capital asset was sold on 26.02.2011. The capital asset was purchased on 31.03.2011 and before the purchase of the capital asset the amount was deposited in mutual funds. Therefore in the considered opinion of the bench, before the date of filing of […]...

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No penalty for claim of exemption u/s 54 instead of section 54F

Smt. Gaytri Sharma Vs ITO (ITAT Jaipur)

Penalty under section 271(1)(c) could not be levied as assessee had proved that there was a reasonable cause for making the wrong claim under section 54 instead of section 54F....

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Commencement of property construction prior to transfer of original asset not an impediment for section 54F exemption

The Delhi High Court in case of Bharti Mishra held that section 54F prescribes appropriation of sale consideration within one year before the date of transfer of original asset, two years from the date of transfer or construction of new property within three years from the date of transfer. However, the Act does not prescribe any conditio...

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Exemption U/s. 54 cannot be disallowed just because exemption was claimed U/s. 54F

ACIT Vs Jai Kumar Gupta (HUF) (ITAT Mumbai)

Deduction under section 54 was allowable on purchase of flats as merely because assessee, by ignorance of law or mistake, had claimed deduction under section 54F instead of section 54, such ignorance of law/mistake on the part of assessee could not be utilized to its disadvantage by AO....

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Section 54F not prescribes date of commencement of construction of house property

Tarun Jalali Vs DDIT (ITAT Delhi)

Tarun Jalali Vs DDIT (ITAT Delhi) Where construction of house was commenced even before the date of transfer of original asset, but it was completed within three years after the date of transfer, deduction under section 54F was admissible. Sub-section 4 of section 54F prescribes appropriation of sale consideration of original asset toward...

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Deduction U/s. 54F can be claimed against Gain on Multiple Assets in Multiple Years

Shri Pankaj Chimanlal Patel (HUF) Vs DCIT (ITAT Ahmedabad)

Shri Pankaj Chimanlal Patel (HUF) Vs DCIT (ITAT Ahmedabad) The essential controversy in the instant case is whether deduction under 54F of the Act is available in respect of capital gains arising from sale of more than one long term capital assets, not being residential house (original asset) against the construction or purchase of one [&...

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Section 54F exemption allowable on Sale of Under-Construction Property as same is not residential property

CIT Vs Kalpana Hansraj (Bombay High Court)

CIT Vs Kalpana Hansraj (Bombay High Court) Perusal of sub-section (1) of Section 54 of the Act would show that the exemption would be available to an assesse being an individual or Hindu Undivided Family where the capital gain arises from the transfer of a long-term capital asset, not being a residential house provided the remaining con...

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Section 54F exemption cannot be denied for mere non-completion of construction by builder

Sanjeev Sarin Vs ITO (ITAT Delhi)

Sanjeev Sarin Vs ITO (ITAT Delhi) In this case assessee has within stipulated period, made substantial investment towards purchase of new property and just because builder could not complete construction of residential house, claim of exemption under section  54F of Income Tax Act, 1961 cannot be denied. FULL TEXT OF THE ITAT JUDGMENT Th...

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Expenditure on removal of encumbrance includible in cost of new house property

ACIT Vs Himanshu Jayanti Lal Kamdar (ITAT Ahmedabad)

While computing exemption under section 54F, expenditure incurred towards vacating the new house property from tenants were includible as part of its cost, because existence of encumbrance was specified in the purchase agreement and original cost of acquisition was much lower than fair market value of the house property due to such attach...

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Date of allotment is date on which purchaser can be stated to have acquired the property

Vembu Vaidyanathan Vs Pr. CIT (Bombay High Court)

Vembu Vaidyanathan Vs Pr. CIT (Bombay High Court) During the course of assessment the Assessing Officer examined this claim and came to the conclusion that the gain arising out of sale of capital asset was a short term capital gain. The controversy between the assessee and the revenue revolves around the question as to when […]...

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Exemption U/s 54F allowable on capital gain on sale of depreciable assets

Shri Shrawankumar G. Jain Vs ITO (ITAT Ahmedabad)

Assessee was entitled to claim exemption under section 54F on gain earned on the sale of factory shed as factory shed inherently being long-term capital asset as per the provision of Section 2(42A) even if sale of factory shed was subject to short-term capital gain on the basis of deeming provision as specified under section 50. ...

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Section 54F deduction fully allowable despite property purchase in joint names

Shri Bhatkal Ramarao Prakash Vs ITO (ITAT Bangalore)

Assessee was entitled to the benefit of deduction u/s.54F to the whole extent of investment in purchase of new asset, even though property had been purchased in the joint names of assessee, his wife and son....

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Section 54F deduction not available on failure to deposit unutilized amount in CGS account by due date

Uddhav Krishna Bankar Vs ITO (ITAT Pune)

Assessee was not entitled to claim of deduction under section 54F as assessee had failed to deposit the unutilized amount of capital gains in the capital gains scheme account by the due date of filing of return of income....

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Source of utilization of fund irrelevant for deduction U/s. 54/ 54F

Yatin Prakash Telang Vs ITO (ITAT Mumbai)

Where assessee had purchased new residential house utilizing own funds lying in his saving bank account, deduction under section 54F could not be denied on the allegation that assessee did not utilize capital gains for investment purpose because source of utilization of fund is irrelevant for claiming benefit of deduction under section 54...

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