The Tax Publishers2020 TaxPub(DT) 0163 (Bang-Trib)

INCOME TAX ACT, 1961

Section 54

Although initially assessee purchased a land with a view to put up construction over the same but later changed his mind and instead purchased a residential house, the same could not debar the assessee from claiming benefit of deduction under section 54.

Capital gains - Deduction under section 54 - Allowability - Assessee initially purchased land with a view to put up construction but later changed his mind and instead, purchased a residential house

Revenue denied deduction under section 54 to assessee on the ground that the assessee purchased land by utilizing capital gain but did not put up construction of residential house on the said land and claimed deduction under section 54 in respect of purchase of residential house. Held: It was found that the assessee purchased a piece of land with a view to put up construction on the same but did not do so and instead purchased a residential house property. Further, the provisions of section 54(1) give two options, viz., (i) purchase of a residential house or (ii) putting up of construction in the form of a residential house and there is no prohibition in law for the assessee to opt for either of the mode for claiming deduction. Thus, the fact that initially assessee purchased a piece of land with a view to put up construction over the same but later changed his mind and instead, purchased a residential house, could not debar the assessee from claiming benefit of deduction under section 54.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :


INCOME TAX ACT, 1961

Section 54

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