ITAT allows Section 54EC exemption for investments before sale deed registration

Rahul G. Patel Vs DCIT (ITAT Ahmedabad)

In the case of Rahul G. Patel vs. DCIT (ITAT Ahmedabad), the assessee appealed against the denial of exemption under Section 54EC of the Income Tax Act by the Assessing Officer (AO). The dispute arose when Patel invested in NHAI bonds using the advance payment received from the sale of a capital asset, before the sale deed was officially registered. The AO denied the exemption, arguing that the investment was made before the transfer date, thus disqualifying it under Section 54EC. However, Patel cited CBDT Circular No. 359, dated May 10, 1983

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