ITO-19(3)(1), MUMBAI vs. SANGEETA NARESHKUMAR MEHTA, MUMBAI

“1. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing the deduction u/s 54F of the Act, claimed by the assessee on unregistered residential property without appreciating the fact that the registered Sale Deed & payment of Stamp Duty was an exclusive & singular mode of legal purchase & assumption of ownership of immovable property in the year 2020 (Covid Period)?"

2. "Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing the deduction u/s 54F of the Act, claimed by the assessee on unregistered residential property without appreciating the fact that no other mode or means other than registered Sale/Purchase deed & payment of stamp duty was valid in the year 2020 (Covid Period) and hence, in absence of the same, the fact of ownership

of new property purchased in the hands of claimant of deduction u/s 54F of the Act, was not established "

3. "Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing the deduction u/s 54F of the Act, claimed by the assessee on unregistered residential property, without appreciating the factthe documents presented by the assessee on evidence of ownership could not be sufficient for legal transfer of ownership of the property?"

4. "Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) was right in relying on the decision of HukumchandChoudhary Vs. ITO (2023) 152 Taxmann.com 334(Indore Trib), which was on different facts, wherein the issue was not of allowing the claim of 54F of the Act, where a property is not registered for calming 54F, but was on the accrual of Long Term Capital Gain in the year when Sale Agreement and possession receipt was produced by the assessee rather than in the year when the registration was done ?"

5. "The appellant craves leave to amend or to alter any ground or add a new ground, which may be necessary".

The learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that assessing officer while passing the assessment order disallowed exemption under section 54F of Income Tax Act. The assessee claimed such exemption on the basis of unregistered document about investment in new residential house. The assessee failed to furnish registered sale deed / title document for new house. The ld. CIT(A) accepted the appeal of assessee and allowed relief under section 54F. As

per provisions of Transfer of Property Act, a sale of immovable property of having more than Rs. 100/- value is to be effected only through a registered instrument. Section 54 of Transfer of Property Act deals with sale of immovable property and section 17 of Registration Act mandates registration of transaction of any instrument which create any right title or interest in immovable property. In absence of execution of sale deed, there was no valid transfer of ownership and the assessee has not eligible for exemption under section 54F. The case law relied by ld. CIT(A) is distinguishable on the fact and reliance on such decision in Balraj vs CIT 254 ITR 22 (Delhi) is misplaced. To support his submission, the ld. Sr. DR also relied upon the decision of Hon’ble Apex Court in Suraj Lamp & Industries Pvt. Ltd. vs State of Haryana (2012) 340 ITR 1 (SC). The ld. Sr.

DR submits that in the said decision Hon’ble Apex Court held that immovable property can be lawfully transfer only by way of registered deed of conveyance.

Act. The payment of money is not in fact disputed by assessing officer. The assessing officer disputed the claim of assessee only for want of registered instrument of new asset property.

The ld. CIT(A) in para 7 of his order dated that there is no reference of ownership or registration in section 54F. The ld. CIT(A) by referring the decision of Delhi Tribunal in Sanjay Choudhary vs ITO in and in Hukum Chand Choudhary vs ITO (2023) 152 taxman.com 334 (Indore Tribunal) held that mere non-registration of transaction cannot debar the assessee for claiming relief under section 54F.

123 Taxman 290 (Delhi) held that where the assessee has paid a sum at the time of entering into an agreement for purchase of house property within year from the sale of another property he would be entitled to benefit provided under section 54 even though no registration within said period. We further find that Hon’ble Karnataka High Court in CIT Vs Sambandam Udai Kumar (2012) 345 ITR 389 (Kar) / (2012) 19 taxmann.com 17 (Kar) held that once it is demonstrated that consideration received on transfer of a capital asset is invested in a residential property, fact that transactions involved in purchase or construction of such residential property are not complete in all respects would not disentitle assessee from benefit of exemption under section 54F.

Order was pronounced in the open Court on 13/11/2025.