Section 54F exemption may survive delayed registration when substantial investment and possession of the new home are established.

Section 54F relief was treated as available where the assessee invested capital gains in a new residential property within the stipulated period, paid substantial consideration under an agreement to sell, and obtained possession, even though the registered sale deed was executed later. The Tribunal applied a practical and beneficial interpretation of "purchased" under section 54F, holding that the decisive factors are investment of the gain and acquisition of possession or control, not contemporaneous registration alone. On those facts, delayed registration caused by the property being mortgaged did not defeat the exemption, and the disallowance was not sustainable.

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Issues: Whether exemption under section 54F could be denied merely because the registered sale deed for the new residential property was executed after the stipulated period, where the assessee had paid substantial consideration under an agreement to sell within time and possession was handed over.

Analysis: The assessee had paid Rs. 90,00,000 towards the new property on 31.03.2016, entered into an agreement to sell on 04.05.2016, and the subsequent sale deed recorded both the earlier payment and the agreement. The property was stated to be mortgaged, which delayed registration. Relying on the principle that section 54F is a beneficial provision and that the expression "purchased" is to be understood in a wider and practical sense, the Tribunal held that the decisive factor is investment of the capital gain and acquisition of possession or control, not the mere absence of contemporaneous registration.

Conclusion: Exemption under section 54F was allowable to the assessee; the disallowance was not sustainable.

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