9911796707
TMI Blog1985 (4) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1971 and ended in April, 1973. The proceedings relate to the asst. yr. 1974-75, the accounting year for which ended on 31st March, 1974. The ITO held that the assessee was unable to explain the source of investment of the extent of Rs. 24,475 and, therefore, added this amount to the assessee's income. This was confirmed by the ld. AAC. 3. In appeal before us, the ld. counsel for the assessee contended that the construction of the house lasted during the period relevant to 3 asst. yrs. i.e., 1972-73, 1973-74 and 1975\4-75. The construction having been completed in April, 1973, the investment, if any, made during the accounting period relevant to the asst. yr. 1974-75 was only in respect of the work done during the moth of April, 1973 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 brought to tax as capital gains arising from the sale of a house. The assessee sold the aforesaid house in two portions on the 15th and 16th March, 1974 for a total consideration of Rs. 95,000. The profit on the sale amounted to Rs. 25,525. The assessee claimed that since he had constructed another house, the amount of capital gain was exempt under s. 54 of the Act. It is admitted that the assessee constructed another house at 42-Id-gah hills, Bhopal and occupied it on 24th Oct., 1974. The claim for exemption was rejected on the ground that the assessee did not live in the house that was sold for two years. Sec. 54 provides that where a capital gain arises from the transfer of a capital asset, which in the two years immediately preceding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee for his residence in the two years i.e., the year 1973 and the year 1974 and, therefore, we are of the view that the assessee having constructed a new house the capital gain arising from the sale of old house was not taxable. We would, therefore, delete the addition of Rs. 24,525. 5. The last ground raised in this appeal was about the addition of Rs. 500 made to the business income of the appellant. The ld. counsel for the assessee did not press the point. This ground is, therefore, rejected. 6. In the result, the appeal is partly allowed. The addition of Rs. 24,525 as capital gain is deleted. The addition of Rs. 24,475 as the amount of unexplained investment is also deleted and the matter is restored back to the ITO for deter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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