Decision to contruction is cannot be considered as construction of assets, however provision of capital gain account has to be followeed in consonance with section 139.
and if capital gain account provision followed then assesee can avail exemption.
Section 54F talks about construction/purchase of a residential house against LTCG other than a residential house...
LTCG mentioned under this section is other than a residential house (i.e. this LTCG is inclusive) hence can include anything...
Gifting of land will be dealt as per gift provision 56(2), and capital gain will be chargable in the hand of gift receiver, now since capital gain is chargable to tax in the hands of ABC
There is no direct nexus requirement hence A,B,C can claim exemption u/s 54F, subject to satisfaction of other conditions mentioned in section 54F
Question can arise about ownership of the constructed HP, which need to be seen from relavent documents.....
29[Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.30
54F. (1) 31[Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or 32[two years] after the date on which the transfer took place purchased, or has within a period of three years after that date 32a[constructed, a residential house] (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,—
(a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ;
(b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45:
33[Provided that nothing contained in this sub-section shall apply where—
(a) the assessee,—
(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or
(ii) purchases any residential house, other than th//e new asset, within a period of one year after the date of transfer of the original asset; or
(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and
(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head “Income from house property” .]
Explanation.—For the purposes of this section,—
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