Get capital gain exemption if provisional possession transferred within two years of disposal of the old property

In significant judgement in Dr. Jasvir Singh Rana vs. II Dept., tge Delhi ITAT, in a significant ruling, held that assessee can avail the benefit of capital gain exemption if provisional possession of the new property was transferred within two years of disposal of the old property.

The bench, while overruling the contentions of the department, ruled that when the provisional possession of the property is transferred to the assessee, benefit of section 54F of the Income Tax Act, 1961 cannot be denied to him merely on ground that the registration of the sale deed has not been made in his favour. Assessee sold his immovable property and jewellery for purachasing a new residential unit from M/s. Unitech Acacia Project Private Limited which was provisionally allotted to him. Assessee further deposited the remaining property in the capital gain account scheme and claimed u/s 54 and 54F of the Income Tax Act. However, the claim was rejected by the department on ground that the assessee has failed to purchase or construct residential house within period of one year and there years as the case may be. According to the department, the benefit of s.54F is not available to assessee since the amount of capital gain remained unutilized. Perafter analyzing the agreement entered into between the assessee and M/s. Unitech Acacia Projects Pvt. Ltd, the bench noted that the possession of the plot was to be handed over to the assessee within a period of six months.

Article referred: http://www.taxscan.in/assessee-can-avail-benefit-capital-gain-exemption-possession-new-property-transferred-within-2-years-delhi-itat/11411/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29