Section 54
Querist : Anonymous
Querist : Anonymous
No where it states. So why insist on possession?
Querist : Anonymous
Further sale of the asset under construction will not qualify you from exemption under capital gains.
Where the assessee transferred only his interests in two flats under construction of which possession was not taken and was not fit for human habitation, such transfer could not be treated as transfer of residential house. Hence, the capital gain derived by the assessee related to a capital asset held by him for a period of more than 36 months and, therefore, the gain arising from the transfer of his rights in the said flats constituted longterm capital gains. The assessee would, therefore, be entitled to grant of exemption under section 54F. [Jagdish Chander Malhotra v ITO (1998) 64 ITD 251 (Del)]
Querist : Anonymous
The AO can disallow your claim for sec 54 exemption.
.
Firstly- this is the case of "Purchase of Property" and not the case of Construction of the Property".
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When the amount of Capital Gains has been invested by the assessee within the time frame provided by the law, for purchasing a residential property, he becomes eligible to get the deduction.
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This section requires -Purchases and not the "Possession". We can say that for this section Purchases includes right to Purchase also.
.
In Section 54, the phrase "New Asset" also
has got its own importance. In my view, "New Asset" can cover the right to purchase also.
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So, condition of retaining the "New Asset" for 3 years from the date of its purchases is also being complied with.
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As such, it is not open to the AO to disallow exemption U/s Section 54.
.
Querist : Anonymous
Pints noted.
Querist : Anonymous
Thanks for consideration.
Querist : Anonymous
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