Section 54F requires only the assets to be purchased within specified time, date of booking / payment not relevant

CA Sandeep Kanoi

Authorised Representative submitted that as per section 54F(1), the only condition required to be satisfied for the assessee to avail the exemption there under was that the assessee should within a period of one year before or two years after the date of transfer, purchase or within a period of three years construct a residential property. It is submitted by the learned Authorized Representative that there is no dispute with regard to the fact that the assessee received compensation of Rs.84,61,701 as compensation for acquisition of the land i.e. the old asset acquired for the Bangalore Metro on 21.7.2008. The learned Authorized Representative further submitted that there was also no dispute with regard to the fact that the assessee acquired a residential flat at Gokulam, Kanakpura Road, Bangalore for Rs. 50,98,720 by registered sale deed dt.11.9.2008 and therefore has satisfied the conditions required for being allowed exemption u/s.54F of the Act as claimed at Rs.46,11,166. The learned Authorized Representative contended that since various courts have held that the only condition to be satisfied is that the new residential property should be purchased within the specified period of one year before or with two years after the sale of the old capital asset, which has been done by the assessee in the case on hand, the assessee is entitled to be allowed exemption under section 54F of the Act. The issues raised by the authorities below to deny the assessee the said exemption u/s.54F viz. (i) that the booking for the said flat was made by the assessee on 19.1.2006; (ii) that a loan of Rs. 40 lakhs was taken from Syndicate Bank on 24.5.2006 towards investment in the said flat being more than one year, prior to sale acquisition of the said property on 21.7.2008, the learned Authorized Representative submits, is not material, since the assessee has acquired the new property i.e. ;the flat, only on 11.9.2008 by Registered Sale beed and not before that. The learned Authorized Representative submits that all acts by the assessee to book the said flat in 2006 and availing of housing loan for investing therein in 2006 do not confer ownership of the said property in the said flat. In this view of the matter, the assessee prays that he is entitled to be granted exemption u/s.54F of the Act as claimed by it. In support of the assessee’s claim for deduction u/s.54F of the Act, the learned Authorized Representative inter alia relied on the following judicial pronouncements –

(i)   CIT V Arvinda Reddy T N (1979)120 ITR 46.

(ii)   ITO V K C Gopalan (2000)107 Taxman 591 (Kar)

(iii) Fatima Bai V ITO (2009) 32 bTR 243 (Kar).