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TMI Blog1996 (4) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial house out of the sale proceeds of the shares within the time allowed under section 54F. The assessment was completed on 18-7-1988 on a total income of Rs. 2,69,406 accepting the exemption claimed under section 54F. The period of three years for the construction of the house expired on 16-4-1989, i.e., three years from the date of the transfer of the original asset. The Commissioner of Income-tax while going through the assessment records found that on personal inspection of the newly acquired asset it was noticed that the residential house was still under construction on 16-4-1989 and that the same could not be occupied as on the said date. As the conditions prescribed under section 54F has not been fulfilled, the exemption granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a residential flat. It was stated that the assessee has spent a sum of Rs. 1,54,000 towards the cost of the land and a sum of Rs. 7,22,500 was spent towards the cost of construction up to 17-3-1989. Therefore, it was stated that the assessee had spent the entire net sale consideration towards the cost of construction of a house. Hence the assessee is entitled to the relief under section 54F. Insofar as the incomplete work is concerned, it was contended that major part of the construction of the house property was completed within the period stipulated under the provisions of section 54F and the entire amount of the sale consideration of the original asset was also spent. Therefore, even if a little work is left over to be completed, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's claim for exemption under section 54F and the CIT was not justified in holding that the assessee has not complied with the provisions contemplated under section 54F. The learned counsel also relied upon the decision of the Supreme Court in the case of Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188 in support of his contention that a beneficial provision has to be construed liberally so as to promote the purpose for which it was introduced. The learned counsel also contended that even the property was subjected to property tax by the Municipal Corporation for the second half of 1988-89. Therefore, it should be presumed that the construction of the house property in dispute was completed as on 16-4-1989, i.e., within the period of three y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompleted so as to make it fit for occupation. The contention of the assessee was that the entire net sale consideration was invested on the construction of the building, excluding a sum of Rs. 1,03,000, which was deposited in the Units of UTI (Capital Gains Scheme) within six months from the date of the sale. According to the assessee, the entire net consideration was invested in the construction of the residential house and the entire construction of the structure was completed, though a little more work is to be completed so as to make it fit for occupation. As the entire net consideration was invested in the construction of the house property, it should be considered that the assessee has complied with the conditions specified under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is not required. We find force in the argument of the learned counsel for the assessee. The said intention is very clear from the two circulars issued by the CBDT, where it was held that an assessee is entitled to the benefit of sections 54 and 54F, if an assessee gets an allotment under the selffinancing scheme and pays the first instalment of the cost of construction. From that it is clear that in order to get the benefit under section 54F the assessee need not complete the construction of the house and occupy the same. Admittedly in the present case, the assessee had invested the entire net consideration within the stipulated period and in fact has even constructed the entire residential property, except some finishings to make it fit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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