Section 54F deduction for flat booking allowed where substantial payment was made in time despite delayed registration.

Section 54F exemption was treated as a beneficial provision requiring liberal construction where the assessee booked a flat and paid substantial consideration within the stipulated period. The investment, made through staged construction-linked payments, was supported by CBDT circulars treating such arrangements as construction cases, and even on the purchase limb, substantial payment and acquired domain over the flat were sufficient. Registration of the sale deed was not regarded as mandatory for the claim, and the disallowance was set aside.

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Issues: Whether deduction under Section 54F of the Income-tax Act, 1961 was allowable where the assessee booked a flat and paid substantial consideration within the stipulated period, but the registered sale deed was executed after two years from the date of transfer.

Analysis: Section 54F is a beneficial provision and must receive a liberal construction. The investment was made through booking of a flat with staged payments linked to construction, and the CBDT circulars treating such transactions as construction cases supported the assessee's position. Even assuming the transaction fell within the purchase limb, the decisive consideration was that the assessee had acquired substantial domain over the flat by making substantial payment within the statutory period; registration of the sale deed was not imperative for the claim. The earlier judicial precedents relied upon recognised that the expression "purchase" for purposes of capital gains exemption does not require a cash-and-carry transaction or immediate registered conveyance.

Conclusion: The deduction under Section 54F was held allowable to the assessee, and the disallowance made by the lower authorities was set aside.

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