Section 54F – Mere letter of allotment cannot be considered as investment in residential house

CA Sandeep Kanoi

The assessee surrendered tenancy right on 13.9.2005 for a sum of Rs. 1.67 crores after deducting the legal fees , the net consideration came to Rs. 1.66 crores which was also the amount of net capital gain. As per provisions of Sec. 54F, the assessee was supposed to construct the residential house within three years or purchase within two years , to save himself from the liability of paying capital gain tax. The assessee heavily relied upon the letter of allotment dt. 7.10.2005. However, on that

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