Indihaf Jamal Mohamed Vs ITO (ITAT Chennai)
Registration Delay Not Fatal: Builder’s Delay Can’t Deny 54 Deduction- ITAT Says 54 Allowed If Payments Made in Time
Assessee, a retired Assistant Registrar, sold his residential house on 16.09.2015 for Rs.60 lakh & claimed deduction u/s 54 after reinvesting Rs.48,00,114 in a flat at “Lake Dugar”, Ambattur. AO denied the claim solely because the registration of the new flat occurred on 24.01.2019—beyond one year—stating that “transfer has not taken place” within the stipulated time. FAA passed an ex-parte order upholding the disallowance.
Before Tribunal, Assessee produced sale deed, construction agreement dated 24.12.2015, bank statements, & payment proofs showing that entire consideration was paid within five months, i.e., well within one year from sale. Tribunal noted that delay in registration was due to the builder & not attributable to the Assessee. Relying on CIT Vs Sardarmal Kothari (302 ITR 286) & CIT Vs Shakuntala Devi (389 ITR 366), Tribunal held that completion or registration of the new property is not mandatory; what matters is utilization of capital gains within the prescribed period. Tribunal found the claim prima facie eligible but since documentary evidence was not fully examined by AO due to ex-parte proceedings, the matter was remanded back to AO for fresh verification, directing that Assessee must be given proper opportunity.
