ACIT Vs Rahul Nath (ITAT Delhi)
Section 54F does not prescribe submission of a completion certificate as a mandatory condition; Substance Over Procedural Formalities-Section 54F does not prescribe submission of a completion certificate as a mandatory condition; Exemption Under Section 54F Upheld Due to Proof of Timely Construction; Substance Prevails Over Procedure in Section 54F Capital Gains Relief; Section 54F Claim Cannot Be Denied for Want of Completion Certificate; Capital Gains Exemption Restored as Law Does Not Require Completion Certificate; Section 54F Exemption Allowed Because Completion Certificate Is Not Mandatory
The dispute before the Income Tax Appellate Tribunal (ITAT), Delhi, arose from the denial of exemption claimed under section 54F of the Income-tax Act, 1961. The assessee, an individual, had earned long-term capital gains from the sale of shares and invested the net consideration in the purchase of land and construction of a residential house. Based on this investment, exemption under section 54F was claimed. During assessment proceedings, the Assessing Officer disallowed the exemption primarily on procedural grounds, namely the assessee’s alleged failure to produce the registered purchase deed, adequate documentary evidence of construction expenses, and a completion certificate from the competent local authority. The Assessing Officer also expressed doubts regarding whether the construction was completed within the prescribed statutory time limit.
