Date of possession to be considered as date of purchase of property for claiming exemption u/s 54
Sunil Amritlal Shah v. Income-tax Officer (International Taxation)
[2024] 162 taxmann.com 676 (Mumbai – Trib.)
Date of Pronouncement : MAY 13, 2024
In the above cited case the AO took the date of purchase agreement as the date of purchase of property and, accordingly, did not allow deduction u/s 54.
However Hon’ble ITAT Mumbai Bench held that that assessee is entitled to deduction u/s 54 of the Act on purchase of new property considering the date of possession , when it is completed, as the date of purchase of property. This is because the agreement to purchase was for an under-construction property. By entering into an Agreement to purchase assessee has acquired right to purchase the property and did not purchased the property as same was under construction. Section requires “Purchase” of property.
The copy of the order is as under:
