TaxTMI 
TaxTMI 
2026 (6) TMI 45
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.... the assessee against the re-assessment order passed under Section 147 read with Section 144B of the Income Tax Act, 1961 (the Act) dated 12th February 2024 passed by the National Faceless Assessment Centre, Delhi (the learned AO), was dismissed. The assessee is aggrieved and is in appeal before us. 2. The solitary ground of appeal before us is denial of deduction under Section 54F of the Act amounting to Rs. 29,22,097/- for the reason that assessee sold property on 7/1/2015, assessee should have purchased new property by 6/1/2017, but assessee acquired a flat by registered sale deed in assessee's favour only by 6/3/2017, though substantial payment and booking is made within the two years period, by holding that the assessee has fail....
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....nt order denying the above deduction was passed on 12th February 2024. 4. The assessee preferred an appeal wherein assessee submitted that as assessee has booked the flat and therefore the assessee should be granted deduction under Section 54F of the Act. The learned CITAppeal did not considered that booking of the flat amounts to purchase of new flat and hence the denial of deduction under Section 54F was confirmed. 5. The assessee submitted a paper book containing 141 pages and relied upon the decision of the Hon'ble Bombay High Court in case of Humayun Suleman Merchant dated 18th August 2016. Thus, the claim of the assessee was that the date of acquisition of the new property should be related to the date of booking of the flat and....
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....property i.e. 5/1/2015. Thus, the deduction was denied. The sale of the property for which capital gain is chargeable to tax was made on 7th January 2015. 8. According to Section 54F of the Act the net consideration chargeable to tax on transfer of a long-term asset is eligible for deduction if the assessee purchases within 2 years after the date of the transfer of one residential house and then proportionate capital gain is exempt. The provision is admittedly a beneficial one, designed to promote investment in residential housing, and on the settled canon attracts liberal construction. 9. In this case the property was sold on 7th January 2015 and therefore within 2 years the assessee should have purchased the new house property, but ....
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....ction 54 F of the act. 11. Even on the narrower assumption that the transaction is one of "purchase" governed by the two-year limit, the registered sale deed executed beyond two years does not defeat the claim. The locus classicus is Commissioner of Income-tax vs. T.N. Aravinda Reddy [1979] 2 Taxman 541 (SC)/[1979] 120 ITR 46 (SC)/[1979] 12 CTR 423 (SC)[05-10-1979] (1979) 120 ITR 46 (SC), where the Hon'ble Supreme Court held that "purchase" in Section 54(1) carries its ordinary meaning of buying for a price, with no statutory insistence on a "cash and carry" or registered-conveyance basis. Honourable Sc held that: - "In plain English, the transferee purchases the share of each of his brothers. It is for a price of Rs. 30,000....
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....ment in kind or adjustment towards an old debt or for other monetary consideration from the legal meaning of that word in section 54(1). If you sell your house and make a profit, pay Caesar what is due to him. But if you buy or build another subject to the conditions of section 54(1) you are exempt. The purpose is plain ; the symmetry is simple, the language is plain. Why mutilate the meaning by lexical legalism. We see no stress in the section on "cash and carry." The point pressed must, therefore, be negatived. We have declined to hear Shri S.T. Desai's artillery fire although he was armed cap a pie with Mitakshara lore and law. A point of suffocating scholarship sometimes arrives in court when one nostalgically remembers the escapist....
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....ot necessary that the assessee should become the owner of the property. Section 54 speaks of purchase. Moreover, the ownership of the property may have different connotations in different statutes. In view of various decisions of the Supreme Court, it was to be held that the Tribunal went wrong in holding that for the purpose of applicability of section 54, registration of document is imperative. Therefore, the assessee was entitled to exemption in terms of section 54. Registration of the document is not imperative for attracting Section 54; it is not necessary that the assessee should become the full legal owner. In instant case, it is not the case of the revenue that flat was not registered in the name of the assessee or consideration pai....