Section 54F Exemption Cannot Be Denied If Construction Began Before Sale: Delhi HC

CIT Vs Bharti Mishra (Delhi High Court) The respondent-assessee, an individual, had sold shares on 17 September 2008 and invested ₹54,86,965 from the proceeds in constructing a residential property. Out of this, ₹37,99,000 was used for construction before filing the return and ₹16,87,965 was deposited into a Capital Gains Account Scheme before the due date under Section 139. The Assessing Officer (AO) denied exemption under Section 54F, holding that (a) the house construction began before the sale of shares, and (b) construction was not completed within three years. The Commissioner of I...