sec.54F exemption availability...Urgent Sir!!!

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This query is : Resolved

Rajesh (Querist)

13 August 2010 Dear Experts,
An assessee wants to buy a residential house property (already he owns one) by selling a long term capital asset(other than house property). Now he wants to buy a residential house property on the sale proceeds of the capital asset. But he wants to buy the land (eg.10 cents)and register the land in his name in two documents (i.e. 6 cents + 4 cents) The land going to be purchased is not separate only documentation is done separately. The documents are also registered in his own name only. In such a case can the Assesee claim section 54F of the Income Tax act for the whole 10 cents or only to 6 cents (maybe for 4 cents too). Is there any Case law specifically addressing that though registered 6 cents and 4 cents in 2 documents since the owner being the same and land is also not bifurcated we can treat the whole 10 cents as one land. However on the 10 cents assessee is going to build only in 2 cents. Can we claim exemption u/s 54F for the whole 10 cents.
With regards,
Rajesh.

Manoj Mhatre

Manoj Mhatre (Expert)

14 August 2010 Dear Rajesh,

You can do whatever as mentioned above provided if you purchase land 60% of your share should be more than or equal to net sales consideration and if investment amount is less than net sales consideration then this difference to you have to invest in capital gain saving account to construct building in 20% area as mentioned by you.

i hope i have cleared your doubt. if you still need case laws on this. i will try to provide you

CMA Arif Farooqui

CMA Arif Farooqui (Expert)

14 August 2010 assessee owns more than one residential house property (other than new house purchase for exemption)on date of transfer, so exemption u/s 54 F would not be allowed.

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