Non-registration of agreement to sale etc. does not disentitle assessee to claim benefit u/s 54F.

In the case of Muthu Daniel Rajan v/s ACIT, Chennai [ITA No. 1675/Chny/2019], Chennai Tribunal held that in order to claim the deduction u/s 54F, conditions including investing the sales consideration for purchase of residential property needs to be satisfied within the time duration specified and some technical lapses like non-registration of agreement to sale etc. does not disentitle assessee to claim benefit u/s 54F, in case, the assessee proves with evidences that finally he had registered the property in his favour.

Reliance is placed on the ruling of Hon’ble Apex Court in the case of Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana & Another [2012] 340 ITR 1 (SC), where it was held that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Further, as per the Stamps and Registration Act, the title and interest in the property will not transfer to the buyer unless such transfer is by way of a deed, as held by the Hon’ble Apex Court.

Further, with regard to multiple deductions claimed in respect of investment in same property, reliance is placed on ACIT v. Mahinder Kumar 84 taxmann 141 (Delhi-Trib.), where it was held that capital gains on sale of house property can be invested in construction / purchase of house property more than once for same property.

Thus, appeal filed by the assessee is allowed and directed the AO to allow deduction u/s 54F as claimed by the assessee and delete additions made towards disallowance u/s 54F.

 

Non-registration of agreement to sale etc. does not disentitle assessee to claim benefit u/s 54F.