Completion of construction not required to claim exemption U/S 54: ITAT Bangalore
DCIT Vs Bagalur Krishnaiah Shetty Vijay Shanker (ITAT Bangalore)
Appeal Number : ITA No. 1174/Bang/2024
Facts:
1. During the course of assessment, AO noticed that the assessee had sold a property for a consideration of Rs. 18,70,00,000/- and after claiming deduction towards selling expenses and indexation on cost of acquisition has arrived at a long term capital gain of Rs. 12,81,11,799/-.
2. AO further noticed that the assessee has claimed exemption u/s. 54 of the Income Tax Act, 1961 to the tune of Rs. 12,06,51,057/- and offered the long term capital gain of Rs. 74,60,742/- to tax.
3. AO did not allow the exemption claimed by the assessee for the reason that the construction was not completed. CIT(A) allowed the appeal. Being aggrieved, the present appeal is filed.
ITAT Bangalore held as below:
1. Hon’ble Jurisdictional High Court in the case of Sambandam Uday Kumar has held that the condition precedent for claiming the benefit u/s. 54 of the Act is that the assessee should have parted with the gain realised from sale of property by investing the same in either purchasing or in constructing a residential house and that completion of construction or occupation is not a requirement of law.
2. There is no infirmity in the decision of the CIT(A) in allowing the exemption u/s. 54 of the Act based on the amount utilised by the assessee towards construction of new house property where the construction is not complete.
The copy of the order is as under:
