INCOME TAX ACT, 1961

Section 54F

Capital gains - Deduction under section 54F - Allowability - Assessee purchased multiple flats in same building

Assessee sold a land and sale consideration was used for purchase of 12 residential flats in a building. He claimed exemption under section 54F. AO alleged that the assessee had no credible evidence in the form of registered sale deed or agreement. He further, alleged that the assessee purchased multiple flats in a building spread over 3 floors and they were all independent units and, therefore 12 independent flats could not be treated as one residential house and accordingly, the AO denied the claim of exemption under section 54F. Held: AO alleged that the sale agreement entered into by assessee for purchase of 12 flats was not registered. Though the residential property was not registered but the assessee was able to prove the possession of the flats and the builder also confirmed the same, therefore, the exemption under section 54F could not be denied on said ground. Further, the amendment to section 54F in Finance Act, 2014, whereby exemption for more than one unit /flat (residential house) is withdrawn, is operative only w.e.f. 1-4-2015. In instant case, the assessment year being 2009-10, the amended section 54F would not be applicable to it. Therefore, the assessee was entitled for exemption under section 54F for more than one residential flat in same building and accordingly, the assessee claim for exemption under section 54F was allowed.

Relied::CIT v. VR. Karpagam [ITA No.301 of 2014 Dt.18-8-2014].

REFERRED : CIT v. KG. Rukminiamma (2011) 331 ITR 211 (Karn) : 2011 TaxPub(DT) 429 (Karn-HC)

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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