Section 54F of Income Tax Act, 1961— In the instant case, all the grounds of appeal are related to deduction claimed u/s 54F of income tax act.

The AO noticed that the assessee has sold certain properties in nine documents for a consideration of Rs. 36,26,500/-, with a market value of Rs. 40,01,000/- and claimed the deduction u/s 54F of the Act. The AO issued show cause notice asking the assessee, as to why the sale consideration should not be treated as income under the head ‘business ’ as per provisions of section 45(2) of the Act and as to why the exemption claimed u/s 54F should not be disallowed?

Held that— we hold that the assessee is eligible for deduction u/s 54F even if the construction is commenced before transfer of the capital asset and completed the construction within the period provided in 54F of the Act. Therefore, we set aside the orders of the lower authorities and allow the appeal of the assessee.[NATTA SURYARAO S/O LATE MANGANNA VERSUS INCOME TAX OFFICER WARD-1 TANUKU][2019] 18 ITCD Online (4) [ITAT VISAKHAPATNAM]