Capital Gains Relief Under Section 54F Granted Despite Incomplete Construction When Full Investment Made Within Time Limit

ITAT ruled on three key issues in a capital gains case. The Tribunal determined Rs. 10,85,28,620 as full sale consideration for land rights relinquishment, rejecting assessee's claim for net amount adjustment against outstanding loans due to absence of explicit stipulation in resolutions. On Section 54F deduction, ITAT allowed relief following Karnataka HC precedent that investment of entire consideration within stipulated period suffices, even if construction remains incomplete. However, legal charges, advance maintenance, and certain registration fees were excluded from eligible deduction amount. Regarding interest expenses under Section 57, ITAT partially allowed the appeal, directing AO to recalculate disallowance based on closing loan balances rather than opening balances, while maintaining that interest on society loans constitutes capital expenditure. .....

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