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Appeal against deletion of addition on long-term capital gains on house transfer. Analysis: The case involved an appeal by the Department and a cross-objection by the assessee against the order of the CIT(A) regarding long-term capital gains on the transfer of a house for the assessment year 1993-94. The Revenue contended that the CIT(A) erred in deleting the addition of Rs. 76,957 made by the AO, as the new house was not constructed within the prescribed period, the sale proceeds of the old house were not utilized for the new house, and the capital gain was not kept in a specified deposit. The facts revealed discrepancies in valuation reports, ownership of the property, and utilization of funds for construction. The AO adopted a valuation for the new house and argued that the long-term capital gains were chargeable to tax as the investment was not made by the assessee in his own house. On appeal, the assessee argued that the capital gains were utilized for constructing a new house, of which he was a co-owner, and therefore, no capital gains were chargeable under section 54 of the IT Act. The CIT(A) accepted the assessee's plea and deleted the addition based on the provisions of section 54. The Department appealed against this decision, while the assessee sought confirmation of the order. The assessee relied on legal precedents to support the claim that no long-term capital gains were chargeable due to the investment in the new house. The Tribunal, after considering the arguments and case law cited, upheld the CIT(A)'s decision to delete the addition. The Tribunal found the CIT(A)'s reasoning sound and convincing, noting that the Department did not point out any flaws in the order. Therefore, the appeal of the Revenue was dismissed. Consequently, the cross-objection became infructuous and was dismissed as well. Ultimately, both the appeal of the Revenue and the cross-objection of the assessee were dismissed based on the findings and conclusions of the CIT(A) and the Tribunal.
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