Section 54 deduction turns on acquisition of enforceable rights in a new home, not merely deed registration.

Deduction under section 54 was considered allowable where the assessee produced booking and allotment documents, bank statements and ledger entries showing payment for the new residential property. Registration of the conveyance deed was treated as not essential when enforceable rights in the new asset had been acquired and the investment requirement was substantially met. The timing of individual instalments, including payments made before the transfer date, was regarded as less significant than the fact of acquisition within the statutory framework, consistent with the beneficial object of the provision.

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Issues: Whether deduction under section 54 of the Income-tax Act, 1961 could be denied on the ground that the new residential property was not registered and that certain payments were made before the transfer date.

Analysis: The assessee produced the booking and allotment letter, bank statements, and ledger accounts evidencing payment for acquisition of the new residential property. The material on record did not disprove the genuineness of the transaction. Registration of the conveyance deed was not treated as essential where the assessee had acquired enforceable rights and had substantially complied with the requirement of investment in the new asset. The timing of individual instalments was held to be less significant than the fact of purchase or acquisition of rights within the statutory framework, and the provision was read in a manner consistent with its beneficial object.

Conclusion: Deduction under section 54 was allowable and the disallowance was unsustainable; the addition was deleted in favour of the assessee.

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