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S. 54F Benefit not available If Construction Work Precedes Transfer of Immovable Property

In Ushaben Jayantilal Sodhan Vs. Income Tax Officer, the Gujarat High Court held that the benefit under Section 54F of the Income Tax Act, 1961 could not be availed by an assessee, if construction work precedes the transfer of immovable property. 

The assessee on her land constructed 8 flats, out of which 4 were retained for her use and the other 4 were sold.  The assessee considered the proportionate land apportioned to the 04 flat purchasers as the sale of land belonging to her and disclosed long-term capital gain of Rs.58.87 Lacs in the process. The Assessing Officer (A.O.), during the scrutiny assessment of the Return filed by the assessee, raised an objection to the assessee’s claim of deduction from the capital gains received by her on the ground that no construction was carried out after 23.10.2008, which is the date on which the Building Use Permission was granted.

Article referred: http://www.taxscan.in/construction-work-transfer-immovable-property-gujarat-hc/23268/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29

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