Section 50C cannot be imported into Section 54F; full exemption follows where actual sale proceeds are reinvested in a new house.

The Tribunal reiterated that the deeming fiction in section 50C applies only to computation of capital gains under section 48 and cannot be extended to section 54F exemption. For section 54F, the relevant test is whether the assessee invested the net consideration, meaning the actual sale consideration received, in a new residential house. As the assessee had invested the entire actual sale proceeds in purchase and construction of the new house, the conditions for exemption were satisfied. The exemption was therefore to be allowed on the basis of actual consideration, not the deemed stamp duty value.

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Issues: Whether the deeming fiction under section 50C of the Income-tax Act, 1961 can be applied while computing exemption under section 54F, and whether the assessee was entitled to full exemption where the actual sale consideration was invested in a new residential house.

Analysis: The question turned on the distinction between the "full value of consideration" deemed under section 50C for computation of capital gains under section 48 and the "net consideration" referred to in section 54F for grant of exemption. The Tribunal held that the statutory fiction in section 50C is confined to section 48 and cannot be extended to section 54F. Since the assessee had invested the entire actual sale consideration in purchase and construction of the new residential house, the condition for exemption under section 54F stood satisfied. The Tribunal therefore directed that the exemption be allowed on the basis of the actual consideration received and not the deemed stamp value.

Conclusion: The assessee was entitled to exemption under section 54F, and the deeming value under section 50C could not be imported for that purpose.

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