Query on 54 54F etc

Hi..Hareesh

As per the  CBDT is view that the cost of the  Land is integral part of the cost of residential house , wether purchase or built. Accordingly amount of investment for the purpose of exemption the agreegate investment made towards purchase of land and also towards construction of a residential house thereon, should be consider , Provided that the acquisition of land and also the construction thereon , are complited within the period specified in Section  i. e Purchased within 1 year before or 2 year after the date of transfer, or has constructed within 3 year after the date of transfer.

The above clarifications from CBDT would be eually apply to 54F

 Thanx Premnivas for the reply...the reply to my first ques is quite clear now..

But you said the construction should be complete within the time period which is stated in the act..But i guess i read through a case in this club where the amount was allowed even thou the construction wasnt completed as its a favourable section for the assessee...i ll try to get the details of the case if poss too...

Hi..

Hareesh ,In my  Reply "Consider" word use for Land or Construction both are eligible and secondly  Provide the word "are" complited within specified period therefore it is obivious  contrction must be complited within 3 years for exemption.

 Ya I know the act says this...Now here is the case law posted in one of the earlier posts...This says something about the completion of construction..I know its a particular issue..But u can go through it

Case law

Mrs. Seetha Subramanian. vs Assistant Commissioner Of Income-Tax. [59 ITD 94]ITAT , Madras :- CIT , after enquiry by an Inspector found that the house is not completed and passed order u/s 263 by which he disallowed the claim of assessee u/s 54F ruled as under. Before the Tribunal, the contention of the assessee was that the provisions of section 54F is a beneficial provision for promoting the construction of residential houses. Therefore, the said provision has to be construed liberally and for achieving the purpose for which it was incorporated in the statute. In support of the said contention the assessee relied upon the decision in the case of Bajaj Tempo Ltd. The assessee also relied upon certain circulars issued by the CBDT. One of the circulars wasCircular No. 471, dated 15th October, 1986. This was issued by the CBDT clarifying the position that where an assessee acquires a flat by an allotment under the self-financing scheme of the Delhi Development Authority, the allotment itself is sufficient compliance for getting the benefit under section 54F, even though the assessee has not paid all the instalments due under the said scheme. Later by another Circular No. 672,dated 16th December, 1993, the CBDT has issued clarification extending the same benefits for acquisition of houses or flats on allotment under similar schemes. Therefore it was contended that the intention of the Legislature was to invest in the acquisition of a residential house and completion of construction or occupation 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 self financing 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.

 So dear Premniwas this was the point i was pressing on...Now see the last sentence...The query was whether the decision will be applicable in al general case...this is a particular case of allotment of flat or so...I hope i am clear now friend....



And this is a cut out from a post in the club itself...so if the information is incomplete am sorry too...