Exemption U/s 54F eligible if delay in investment was beyond control of Assessee

Dashrath Ambalal Patel Vs ITO (ITAT Ahmedabad)

Conclusion: Assessee is eligible for exemption u/s 54F for the amount invested beyond the prescribed period but before getting the property registered since there was sufficient reason, beyond the control of the assessee, which prevented the assessee from making investment within prescribed time.

FACTS –

Assessee, an individual, is engaged in the business of labour work for electric fitting. Assessee was the 1/3^rd owner in the property bearing block no. 755-756 measuring about 23169 sq.mt. along with two other persons. The said property was sold for INR 66,00,000 vide sale deed dated 13^th August, 2006. Assessee being 1/3^rd owner of the property had INR 22,00,000 as sale consideration. Assessee had capital gain of around INR 9,57,447, however, claimed exemption u/s 54F on account of investment of INR 11,11,000 in another property.

During the assessment proceeding, AO observed that the new property was registered on 10^th October, 2011 which was beyond the time period prescribed in section 54F and hence AO objected the exemption and accordingly made addition of LTCG amount to INR 9,57,447.

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