9911796707
TMI Blog2022 (7) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue that the new residential house has been constructed within the time stipulated in section 54(1) of the said Act. It is the cost of the new residential house and not just the cost of construction of the new residential house which is to be allowed as deduction. In view of the above by respectfully following the ratio laid down in the case of C. Aryama Sundaram [ 2018 (8) TMI 864 - MADRAS HIGH COURT] where the cost of new residential house which should necessarily include the cost of land, cost of materials used in the construction, the cost of labour and other relatable cost of construction of the residential house has to be considered for the purpose of deduction U/s. 54 of the Act. We therefore direct the Ld. AO to consider the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has commenced the construction of the residential house property before the sale of long term capital asset. 4. The Ld. AR argued that the assessee had purchased the land on 28/12/2012, on which the construction of residential building was commenced before the sale of capital asset. The Ld. AR further submitted that the cost of land be included while calculating the deduction U/s. 54 of the Act. The Ld. AR also relied on the Board Circular No.667, dated 18/10/1993. The Ld. AR also relied on the decision of the Hon ble High Court in the case of C. Aryama Sundaram vs. CIT reported in [2018] 97 taxmann.com 74 (Madras). Per contra, the Ld. DR submitted that the AO has rightly considered the cost of construction subsequent to the date of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or two years after the date on which the transfer of a capital asset taken place, purchases, or has within a period of three years after that date constructed, a residential house. The quantum of deduction is itself dependent upon the cost of such new asset. It has been represented to the Board that the cost of construction of the residential house should be taken to include the cost of the plot as, in a situation of purchase of any house property, the consideration paid generally include the consideration for the plot also. 2. The Board has examined the issue whether, the cases where the residential house is constructed within the specified period, the cost of such residential house can be taken to include the cost of the plot also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of three years after that date constructed, one residential house in India, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernative have expressly made the exemption in the case of purchase, subject to purchase from any advance that might have been received for the transfer of the residential house which resulted in the capital gain. 23. At the cost of repetition, it is reiterated that exemption of capital gain from being charged to income tax as income of the previous year is attracted when another residential house has been purchased within a period of one year before or two years after the date of transfer or has been constructed within a period of three years after the date of transfer of the residential house. It is not in dispute that the new residential house has been constructed within the time stipulated in section 54(1) of the said Act. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
