Section 54F exemption can apply without registered title where construction and deemed ownership of the residential house are established.

Section 54F exemption can be available even without registered title to the newly constructed residential house where the assessee has funded and constructed the superstructure and holds rights amounting to deemed ownership. A person in possession under an agreement falling within section 53A of the Transfer of Property Act may be treated as a deemed owner under section 27(iii)(a) of the Income-tax Act. As the arrangement was not shown to be sham and the Revenue did not dispute the assessee's investment in the house, exemption under section 54F was held to be admissible.

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Issues: Whether the assessee was entitled to exemption under section 54F on the construction of a residential house despite not holding registered title to the property.

Analysis: The assessee had constructed the superstructure on land owned by her husband under a collaboration arrangement and claimed half ownership in the house. Registered title is not a prerequisite for ownership in the income-tax context. A person in possession under a contract falling within section 53A of the Transfer of Property Act is treated as a deemed owner under section 27(iii)(a) of the Income-tax Act. The agreement was not shown to be sham, and the Revenue did not dispute that the investment in the superstructure was made by the assessee. Section 54F requires construction of a residential house; it does not insist on exclusive or registered legal title in the assessee's name.

Conclusion: The assessee was entitled to exemption under section 54F and the denial of the claim was unsustainable.

Ratio Decidendi: For exemption under section 54F, ownership of the newly constructed residential house may be established without registered conveyance where the assessee has constructed the house and is in possession or has rights amounting to deemed ownership under the transfer-of-property principles.

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