The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that the capital gain exemption under section 54F is allowable on the amount spent on interiors, renovation, furnishing etc.
The assessee claimed the cost of acquisition to be Rs.1,72,29,993/-. During the remand proceedings, the assessee herself has agreed for reduction of cost of acquisition by Rs.16,97,098/-, since she could not prove the incurring of expenses to that extent. The assessee contended that the cost of acquisition of Rs.1,55,32,895/- shall be allowed.
Allowing the benefit of the provision, the Tribunal bench comprising Shri N.V. Vasudevan, Vice President and Shri B.R. Baskaran, Accountant Member has observed that there is no dispute that the assessee has invested the money to the above said extent in acquisition of the property.
While concluding the order in favour of the assessee, the Tribunal observed that “The Ld CIT(A) has taken the view that the amount spent after the date of registration of land, i.e., 24.02.2007 for interiors, renovation, furnishing etc cannot be part of acquisition. The Hon’ble Karnataka High Court has held in the case of Mrs. Rahana Siraj (2015)(58 taxmann.com 333)(Kar) that the money spent in additions, alterations, modifications and improvements on the new asset to make it habitable would be eligible for benefit of deduction u/s 54F of the Act. Accordingly, we set aside the view so taken by Ld CIT(A) as it is contradictory to the binding decision of jurisdictional High Court. Accordingly, we hold that the assessee is eligible for deduction u/s 54F of the Act in the amount spent on interiors, renovation, furnishing etc.”
Shri Padam Chand Khincha appeared for the assessee.
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