Section 45, 54F of Income Tax Act, 1961—capital gain—In the instant case assessee has filed the present appeal against the order passed by CIT(A).

During assessment it was found that the assessee sold a land along with others co-owners at a consideration of Rs. 18,00,00,000/-.The assessee has also submitted the valuation report.
The AO was not satisfied with the report of valuation, therefore, called the DVO report who determined the cost of assets of Rs. 81,800/- as on 01.04.1981 and accordingly assessed the long term capital gain. The claim of the assessee u/s 54F of the Act was also denied being the purchased property was not the residential property and was not fully constructed and the total income of the assessee was assessed to the tune of Rs. 4,49,33,200/-.

 Held that— The condition precedent for claiming benefit u/s 54F is that the capital gain should be parted by the assessee and invested either in purchasing a residential house or in constructing a residential house. Merely because the sale deed had not been executed or that construction is not complete and it is not in a fit condition to be occupied does not disentitle the assessee to claim section 54F relief. In the said case Sardarmal Kothari 302 ITR 286 (Mad) was followed. There are some decisions on this point such as CIT Vs. Smt. Shashi Verma (1997) 224 ITR 106 in which specifically held that when the assessee has taken the sufficient steps for construction and has invested the amount, therefore, in the said circumstances it would deemed that the assessee has complied with the provisions u/s 54F of the Act. It is also made clear that if the construction was not completed within the prescribed period and the assesssee has invested the amount, therefore, the claim of the assessee is not liable to be declined u/s 54F of the Act.[SHRI DINESH KHODIDAS PATEL HUF VERSUS ITO, WARD-1 (3) (3) , AHMEDABAD] [2019] 17 ITCD Online (24) [ITAT AHMEDABAD]