Section 54F of the Income-tax Act, 1961 – Capital gains – Exemption of, in case of investment in residential house (Construction) – Assessment year 2011-12 – During relevant year, assessee earned long term capital gain on sale of assets – A part of said gain was not offered to tax because assessee had entered into apartment for purchase of a semi finished apartment – Assessing Officer took a view that said agreement was ‘construction’ in nature and since construction of apartment was not completed within prescribed time period of three years, assessee’s claim for deduction could not be allowed – Whether since assessee had entered into an agreement to purchase semi finished apartment, expenditure incurred for completing finishing work could not be segregated from act of purchasing said apartment – Held, yes – Whether, therefore, subsequent act of construction merged into act of purchase of apartment and in view of fact that assessee had entered into purchase agreement within prescribed time period, his claim for deduction was to be allowed – Held, yes [Para 4] [In favour of assessee]