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Issues:
1. Confirmation of addition of long-term capital gains by withdrawing claim of exemption under s. 54F. 2. Disentitlement of exemption under s. 54F due to ownership of two houses before the due date for investment. 3. Interpretation of the proviso to s. 54F regarding ownership of residential houses. 4. Relevance of occupancy certificate and completion of construction in claiming exemption under s. 54F. Analysis: 1. The appeal was against the CIT(A)'s order confirming the addition of long-term capital gains by withdrawing the claim of exemption under s. 54F. The assessee purchased shares, sold them, and invested the gains in a residential property. The AO denied the exemption, citing ownership of two houses and membership in an AOP. The Tribunal found that the ownership of two houses at different times does not disentitle the assessee from claiming exemption under s. 54F, focusing on the date of investment of capital gains. The judgment cited a similar case to support this view and set aside the CIT(A)'s order, directing the AO to reconsider the exemption claim. 2. The issue revolved around the disentitlement of exemption under s. 54F due to the assessee's ownership of two houses before the due date for investment. The assessee argued that owning a share in a flat through an AOP and entering an agreement for another flat later did not violate the conditions of s. 54F. The Tribunal agreed, emphasizing that the ownership condition applies to the date of transfer of the original asset, not subsequent acquisitions. The judgment highlighted the importance of the timing of ownership and acquisition in determining eligibility for the exemption. 3. The interpretation of the proviso to s. 54F regarding ownership of residential houses was crucial in this case. The Tribunal analyzed the provisions, noting that owning more than one residential house other than the new asset is a disentitling factor. It clarified that ownership at the date of transfer of the original asset is significant. The judgment emphasized that the ownership of two houses at different points in time does not hinder the assessee's claim under s. 54F, as long as the conditions are met at the relevant dates. The decision relied on legal precedents to support this interpretation. 4. The relevance of the occupancy certificate and completion of construction in claiming exemption under s. 54F was also addressed. The AO had raised concerns about these aspects, but the Tribunal deemed them irrelevant in light of the primary act of investing the capital gains. Referring to a previous case, the judgment emphasized that the completion of construction or occupation is not essential for claiming relief under s. 54F. The Tribunal directed the AO to reevaluate the exemption claim based on the investment of capital gains, overturning the CIT(A)'s decision.
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