GOVIND CHANDRA SAHU,MUMBAI vs. ITO WARD42(2)(2), MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 05.02.2026 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short, “the learned CIT(A)”], for Assessment Year 2015-16, whereby the deduction claimed under section 54 of the Income-tax Act, 1961 [in short, “the Act”] was denied and the resultant Long-Term Capital

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Gain of Rs.5,20,438/ Rs.5,20,438/- was sustained. The assessee has raised the was sustained. The assessee has raised the grounds set out in the memorandum of appeal as under: grounds set out in the memorandum of appeal as under: grounds set out in the memorandum of appeal as under:

“The Learned Commissioner of Income Tax (Appeals) erred in confirming the ed Commissioner of Income Tax (Appeals) erred in confirming the ed Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in denying the deduction claimed under Section 54 action of the Assessing Officer in denying the deduction claimed under Section 54 action of the Assessing Officer in denying the deduction claimed under Section 54 of the Income Tax Act and in sustaining the addition of Rs.5,20,438/- on account of the Income Tax Act and in sustaining the addition of Rs.5,20,438/ of the Income Tax Act and in sustaining the addition of Rs.5,20,438/ of Long Term Capital Gain. of Long Term Capital Gain. The Learned CIT(A) failed to appreciate that the Appellant had invested the he Learned CIT(A) failed to appreciate that the Appellant had invested the he Learned CIT(A) failed to appreciate that the Appellant had invested the capital gains in the purchase of a new residential property within the prescribed capital gains in the purchase of a new residential property within the prescribed capital gains in the purchase of a new residential property within the prescribed time by way of allotment and substantial payments to the builder, thereby time by way of allotment and substantial payments to the builder, thereby time by way of allotment and substantial payments to the builder, thereby fulfilling the requiremen fulfilling the requirements of Section 54. The Learned CIT(A) failed to appreciate that the delay in completion of the project The Learned CIT(A) failed to appreciate that the delay in completion of the project The Learned CIT(A) failed to appreciate that the delay in completion of the project and handing over of possession was due to circumstances beyond the control of and handing over of possession was due to circumstances beyond the control of and handing over of possession was due to circumstances beyond the control of the Appellant and attributable solely to the builder and therefore exemption the Appellant and attributable solely to the builder and therefore exemptio the Appellant and attributable solely to the builder and therefore exemptio u/s.54 could not be denied. u/s.54 could not be denied. The Learned CIT(A) erred in disregarding judicial precedents which have The Learned CIT(A) erred in disregarding judicial precedents which have The Learned CIT(A) erred in disregarding judicial precedents which have consistently held that where the assessee has made substantial investment in a consistently held that where the assessee has made substantial investment in a consistently held that where the assessee has made substantial investment in a residential property within the prescribed period, exemption under Section 54 residential property within the prescribed period, exemption under Section residential property within the prescribed period, exemption under Section cannot be denied merely because possession or registration of the property was cannot be denied merely because possession or registration of the property was cannot be denied merely because possession or registration of the property was delayed. The Learned CIT(A) failed to properly consider the documentary evidences The Learned CIT(A) failed to properly consider the documentary evidences The Learned CIT(A) failed to properly consider the documentary evidences including allotment letter, payment details and bank statements submitted during including allotment letter, payment details and bank statements submitted during including allotment letter, payment details and bank statements submitted during the assessment proceedings evidencing the investment in the new residential the assessment proceedings evidencing the investment in the new residential the assessment proceedings evidencing the investment in the new residential property. The addition of Rs.5,20,438/ Rs.5,20,438/- confirmed by the Learned CIT(A) is arbitrary, confirmed by the Learned CIT(A) is arbitrary, unjustified and contrary to the facts of the case as well as the provisions of the unjustified and contrary to the facts of the case as well as the provisions of the unjustified and contrary to the facts of the case as well as the provisions of the Income Tax Act. The Appellant craves leave to add, alter, amend or withdraw any of the grounds The Appellant craves leave to add, alter, amend or withdraw any of the grounds The Appellant craves leave to add, alter, amend or withdraw any of the grounds time of hearing.” of appeal at the time of hearing. 2. Briefly stated, facts of the case are that Briefly stated, facts of the case are that the Assessing Officer the Assessing Officer noted from the Income from the Income-tax portal noted that the the assessee had carried out transaction of purchase and sale of equity shares, credit carried out transaction of purchase and sale of equity shares, credit carried out transaction of purchase and sale of equity shares, credit card expenditure more than card expenditure more than Rs.2,00,000/-, and sold immovable , and sold immovable property worth Rs.49,00,000/ 49,00,000/-, but no return of income was filed , but no return of income was filed

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by the assessee. Accordingly, the assessment was reopened by way by the assessee. Accordingly, the assessment was reopened by way by the assessee. Accordingly, the assessment was reopened by way of notice under section 148 of the Income ce under section 148 of the Income-tax Act, 1961(in short tax Act, 1961(in short ‘the Act’). 2.1 During reassessment proceedings, the Assessing Officer noted ssessment proceedings, the Assessing Officer noted ssessment proceedings, the Assessing Officer noted that the assessee had transferred Flat No. 44, Kendriya Vihar, Flat No. 44, Kendriya Vihar, that the assessee had transferred Kharghar, Panvel, for a consideration of , for a consideration of Rs.49,00,000/ Rs.49,00,000/- on 04.04.2014. 04.04.2014. 04.04.2014. After After After allowing allowing allowing indexed indexed indexed cost cost cost of of of acquisition acquisition acquisition of of of Rs.43,79,562/-, the resul , the resultant Long-Term Capital Gain was Term Capital Gain was computed. The assessee claimed deduction under section 54 in computed. The assessee claimed deduction under section 54 in computed. The assessee claimed deduction under section 54 in respect of investment made in another residential property with respect of investment made in another residential property with respect of investment made in another residential property with JVPD Properties Pvt. Ltd. JVPD Properties Pvt. Ltd. But, said claim of deduction under But, said claim of deduction under section 54 was denied by the Assessing section 54 was denied by the Assessing Officer on the ground that Officer on the ground that the assessee had neither made the entire investment within the the assessee had neither made the entire investment within the the assessee had neither made the entire investment within the prescribed period nor obtained possession of the new residential prescribed period nor obtained possession of the new residential prescribed period nor obtained possession of the new residential property within three years from the date of transfer. Consequently, property within three years from the date of transfer. Consequently, property within three years from the date of transfer. Consequently, the Assessing Officer determine the Assessing Officer determined the Long-Term Capital Gain at Term Capital Gain at Rs.5,20,438/-. The relevant finding of the Assessing Officer is The relevant finding of the Assessing Officer is The relevant finding of the Assessing Officer is reproduced as under: reproduced as under:

“(i) It clearly shows that the assessee has failed to make entire payment It clearly shows that the assessee has failed to make entire payment It clearly shows that the assessee has failed to make entire payment towards investment in new flat within the stipulated period of three years from towards investment in new flat within the stipulated period of th towards investment in new flat within the stipulated period of th date of transfer of original asset. date of transfer of original asset. ii) Further, it emanates from the assessee's submission that he had made ii) Further, it emanates from the assessee's submission that he had made ii) Further, it emanates from the assessee's submission that he had made payment to JVPD Properties Pvt. Ltd. for acquiring new residential property by payment to JVPD Properties Pvt. Ltd. for acquiring new residential property by payment to JVPD Properties Pvt. Ltd. for acquiring new residential property by way of booking flat in a housing project and he could not receive possession of way of booking flat in a housing project and he could not receive possession of way of booking flat in a housing project and he could not receive possession of the new property within the new property within 3 years as the building was not completed and the 3 years as the building was not completed and the matter matter matter was was was taken up taken taken up up with with with the Maharashtra the Maharashtra the Maharashtra Real Estate Regulatory Real Estate Real Estate Regulatory Regulatory Authority(RERA), Mumbai for claiming refund. In the present case, the assessee Authority(RERA), Mumbai for claiming refund. In the present case, the assessee Authority(RERA), Mumbai for claiming refund. In the present case, the assessee has failed to fulfil the conditions laid down in section has failed to fulfil the conditions laid down in section 54(1 54(1) of the Act that an

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assessee who receives the sale consideration has to invest in the new house assessee who receives the sale consideration has to invest in the new house assessee who receives the sale consideration has to invest in the new house within the specified time frame. Considering the submissions made by the within the specified time frame. Considering the submissions made by the within the specified time frame. Considering the submissions made by the assessee, it can clearly be held that the assessee could not be said to have assessee, it can clearly be held that the assessee could not be said to have assessee, it can clearly be held that the assessee could not be said to have acquired a residential property within three years from the date of sale of original residential property within three years from the date of sale of original residential property within three years from the date of sale of original asset i.e. 04/04/2014 since as per the assessee's own admission, the building asset i.e. 04/04/2014 since as per the assessee's own admission, the building asset i.e. 04/04/2014 since as per the assessee's own admission, the building was not completed and he could not get the possession of the property within was not completed and he could not get the possession of the property within was not completed and he could not get the possession of the property within three years. Hence, as a ma three years. Hence, as a matter of fact, even after three years from the date of tter of fact, even after three years from the date of sale of the original asset, the new house did not come into existence and sale of the original asset, the new house did not come into existence and sale of the original asset, the new house did not come into existence and therefore, the assessee had failed to fulfil the conditions specified u/s 54 for therefore, the assessee had failed to fulfil the conditions specified u/s therefore, the assessee had failed to fulfil the conditions specified u/s claiming deduction under it. claiming deduction under it. iii) In this context, a reference can be drawn from the jurisdictional Tribunal in the xt, a reference can be drawn from the jurisdictional Tribunal in the xt, a reference can be drawn from the jurisdictional Tribunal in the ITAT, Mumbai Bench-D in the case of Reji Easow vs. Income Tax Officer Reji Easow vs. Income Tax Officer in IT ITAT, Mumbai Bench Appeal no. 1557 (MUM.) of 2020 [A.Y. Appeal no. 1557 (MUM.) of 2020 [A.Y.-2015-16] wherein it has been ruled that an 16] wherein it has been ruled that an assessee's claim of deduction u assessee's claim of deduction under section 54 of the I.T. Act was to be reckoned nder section 54 of the I.T. Act was to be reckoned from the date of possession of the new residential house property. from the date of possession of the new residential house property. from the date of possession of the new residential house property. Since the assessee has failed to provide the complete payment certificate from the assessee has failed to provide the complete payment certificate from the assessee has failed to provide the complete payment certificate from the said vendor, M/s. JVPD Properties Pvt. Ltd. to effect the said vendor, M/s. JVPD Properties Pvt. Ltd. to effect the purchase or acquiring the purchase or acquiring of new capital asset within the period of 3 years of his transfer (sale) of old asset of new capital asset within the period of 3 years of his transfer (sale) of old asset of new capital asset within the period of 3 years of his transfer (sale) of old asset in order to claim the deduction u/s 54(1) of the Act. In view of above, the long in order to claim the deduction u/s 54(1) of the Act. In view of above, the long in order to claim the deduction u/s 54(1) of the Act. In view of above, the long term capital gain arose on sale of above immovable property is recomputed as term capital gain arose on sale of above immovable property is term capital gain arose on sale of above immovable property is under: Description Amount(Rs.) Amount(Rs.) Sale price of the property 49,00,000 49,00,000 (04/04/2014) Less: Indexed cost of acquisition 43,79,562 43,79,562 Cost of acquisition (08/07/2008) 25,00,000/- With indexation 25,00,000 assessee 240137 Less Deduction u/s 54 as claimed for NIL NIL investment of Rs.22,56,000/- (for the reasons as discussed above) LTCG 5,20,438/- 5,20,438/ Hence, the LTCG determined above comes at Rs.5,20,438/ Hence, the LTCG determined above comes at Rs.5,20,438/- - and the same was considered to be added to the total income of the assessee. considered to be added to the total income of the assessee. 3. Before the learned CIT(A), the assessee contended that the Before the learned CIT(A), the assessee contended that the Before the learned CIT(A), the assessee contended that the requisite payments had been made to the builder within the requisite payments had been made to the builder within the requisite payments had been made to the builder within the prescribed period and that the delay in completion of the project prescribed period and that the delay in completion of the project prescribed period and that the delay in completion of the project and handing over of possession was attributable to the builder. and handing over of possession was attributable to the builder. and handing over of possession was attributable to the builder.

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Reliance was placed, inter alia, upon the decisions in was placed, inter alia, upon the decisions in Balkrishan was placed, inter alia, upon the decisions in Atal v. ACIT (supra) , , Girish L. Ragha v. DCIT (supra) Girish L. Ragha v. DCIT (supra) , Sanjeev Lal v. CIT (supra) and Kishore H. Galaiya v. ITO (supra) Kishore H. Galaiya v. ITO (supra), as well as CBDT , as well as CBDT Circular Nos. 471 and 672. The assessee also stated that the Circular Nos. 471 and 672. The assessee also stated that th Circular Nos. 471 and 672. The assessee also stated that th allotment letter, payment receipts and bank statements evidencing allotment letter, payment receipts and bank statements evidencing allotment letter, payment receipts and bank statements evidencing the investment had been furnished. The relevant submission of the the investment had been furnished. The relevant submission of the the investment had been furnished. The relevant submission of the assessee is reproduced as under: assessee is reproduced as under:

It is respectfully submitted that appellant has made payment to the Builder / It is respectfully submitted that appellant has made payment to the Builder / It is respectfully submitted that appellant has made payment to the Builder / Developers within prescribed time. Merely because appellant could not obtain within prescribed time. Merely because appellant could not obtain within prescribed time. Merely because appellant could not obtain possession and got purchase deed executed with period of three years, possession and got purchase deed executed with period of three years, possession and got purchase deed executed with period of three years, appellant's claim for exemption u/s.54 could not be denied, as it was held in appellant's claim for exemption u/s.54 could not be denied, as it was held in appellant's claim for exemption u/s.54 could not be denied, as it was held in Delhi, ITAT in case of Balkrishan Atal Vs Delhi, ITAT in case of Balkrishan Atal Vs ACIT, New Delhi (2019) 104, 432. Since ACIT, New Delhi (2019) 104, 432. Since appellant has fully invested Capital Gain and due to some financial problem with appellant has fully invested Capital Gain and due to some financial problem with appellant has fully invested Capital Gain and due to some financial problem with Developer, could not completed the construction: Developer, could not completed the construction: Appellant Appellant Appellant has has has complied complied complied with with with all all all the the the requirements requirements requirements of of of claiming claiming claiming exemption/deduction under exemption/deduction under section 54 of the Act. He has made the payment to section 54 of the Act. He has made the payment to the builder within the stipulated time. There was some issue of financing with the builder within the stipulated time. There was some issue of financing with the builder within the stipulated time. There was some issue of financing with Developer, which resulted delay in handing over the possession. This cannot be a Developer, which resulted delay in handing over the possession. This cannot be a Developer, which resulted delay in handing over the possession. This cannot be a reason to deny the exemption under section 54 reason to deny the exemption under section 54 on the touchstone of decision of on the touchstone of decision of Hon'ble Bombay High Court in case of Girish L. Ragha Panaji Vs DCIT in Appeal Hon'ble Bombay High Court in case of Girish L. Ragha Panaji Vs DCIT in Appeal Hon'ble Bombay High Court in case of Girish L. Ragha Panaji Vs DCIT in Appeal No.66 of 2015. Non handling of possession was due to fault on part of the builder and appellant Non handling of possession was due to fault on part of the builder and appellant Non handling of possession was due to fault on part of the builder and appellant has complied with the necessary condition of pay has complied with the necessary condition of payment as required. There is a due ment as required. There is a due agreement and part amount was paid. Accordingly, in such situation, the decision agreement and part amount was paid. Accordingly, in such situation, the decision agreement and part amount was paid. Accordingly, in such situation, the decision of Hon'ble Supreme court in the case of Sanjeev Lal (supra) provides that part of Hon'ble Supreme court in the case of Sanjeev Lal (supra) provides that part of Hon'ble Supreme court in the case of Sanjeev Lal (supra) provides that part payment will also suffice the ingredients of transfer for the purpose of section 54 payment will also suffice the ingredients of transfer for the p payment will also suffice the ingredients of transfer for the p of the IT Act. Appellant has fulfilled all the statutory requirement for availing deduction under Appellant has fulfilled all the statutory requirement for availing deduction under Appellant has fulfilled all the statutory requirement for availing deduction under section 54 of the Act and as such, the disallowance of deduction is unjustified section 54 of the Act and as such, the disallowance of deduction is unjustified section 54 of the Act and as such, the disallowance of deduction is unjustified and unreasonable. The taking of the possession may be delayed because of and unreasonable. The taking of the possession may be del and unreasonable. The taking of the possession may be del many factors not under the control of the assessee due to default on the part of many factors not under the control of the assessee due to default on the part of many factors not under the control of the assessee due to default on the part of the builder and therefore, merely because the possession had not been taken the builder and therefore, merely because the possession had not been taken the builder and therefore, merely because the possession had not been taken within the period of three years, the exemption cannot be denied. within the period of three years, the exemption cannot be denied. within the period of three years, the exemption cannot be denied. Further, referring the case of Kishore H. Galaiyas Vs ITO 20121 24 taxman.com g the case of Kishore H. Galaiyas Vs ITO 20121 24 taxman.com g the case of Kishore H. Galaiyas Vs ITO 20121 24 taxman.com 11 if the assessee had made investment within period of 11 if the assessee had made investment within period of three years, exemption three years, exemption under section 54 could not be denied for the reason that possession has not been under section 54 could not be denied for the reason that possession has not been under section 54 could not be denied for the reason that possession has not been

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taken... There may be delay in taki taken... There may be delay in taking of possession because of many factors not ng of possession because of many factors not under control of assessee, merely because of this exemption could not be denied. under control of assessee, merely because of this exemption could not be denied. under control of assessee, merely because of this exemption could not be denied. Further referring, CBDT in circular No.472 dated 16.12.1993 in which it has been Further referring, CBDT in circular No.472 dated 16.12.1993 in which it has been Further referring, CBDT in circular No.472 dated 16.12.1993 in which it has been made clear that the earlier circular No. 471 date made clear that the earlier circular No. 471 dated 15.10.1986 in which it was d 15.10.1986 in which it was stated that acquisition of flat through allotment by DDA has to be treated as a stated that acquisition of flat through allotment by DDA has to be treated as a stated that acquisition of flat through allotment by DDA has to be treated as a construction of flat would apply to cooperative societies and other institutions. construction of flat would apply to cooperative societies and other institutions. construction of flat would apply to cooperative societies and other institutions. The builder would fall in the category of other institutions as held by Mumbai The builder would fall in the category of other institutions as h The builder would fall in the category of other institutions as h Bench of Tribunal in the case Sm.t. Sunder Kaur Sujan Singh Gadh (supra) and Bench of Tribunal in the case Sm.t. Sunder Kaur Sujan Singh Gadh (supra) and Bench of Tribunal in the case Sm.t. Sunder Kaur Sujan Singh Gadh (supra) and therefore booking of the flat with the builder has to be treated as construction of therefore booking of the flat with the builder has to be treated as construction of therefore booking of the flat with the builder has to be treated as construction of flat by the assessee. flat by the assessee. It is respectfully submitted that details of payment made to builder was It is respectfully submitted that details of payment made t It is respectfully submitted that details of payment made t submitted, attached with Allotment Letter and duly receipted by the builder with submitted, attached with Allotment Letter and duly receipted by the builder with submitted, attached with Allotment Letter and duly receipted by the builder with bank details, cheque number and date. Appellant has claimed same amount in bank details, cheque number and date. Appellant has claimed same amount in bank details, cheque number and date. Appellant has claimed same amount in the return of income. All the bank statement were submitted during the course of the return of income. All the bank statement were submitted during the course of the return of income. All the bank statement were submitted during the course of assessment proceedings and it could have been verified from the same. sment proceedings and it could have been verified from the same. sment proceedings and it could have been verified from the same. 3.1 The learned CIT(A), however, confirmed the disallowance. He The learned CIT(A), however, confirmed the disallowance. He The learned CIT(A), however, confirmed the disallowance. He observed that the original asset was transferred on 04.04.2014, that observed that the original asset was transferred on 04.04.2014, that observed that the original asset was transferred on 04.04.2014, that the assessee had made only part payments towards the new the assessee had made only part payments towards the new the assessee had made only part payments towards the new property, and that possession had not been obtained within three property, and that possession had not been obtained within three property, and that possession had not been obtained within three years. He further noted that the assessee had not produced s. He further noted that the assessee had not produced s. He further noted that the assessee had not produced evidence establishing acquisition of the new residential property evidence establishing acquisition of the new residential property evidence establishing acquisition of the new residential property even thereafter and, accordingly, held that the conditions of section even thereafter and, accordingly, held that the conditions of sec even thereafter and, accordingly, held that the conditions of sec 54 had not been fulfilled. 54 had not been fulfilled. The relevant finding of ld CIT(A) is The relevant finding of ld CIT(A) is reproduced under:

In this appeal, the undersigned proceeds to adjudicate the matter as In this appeal, the undersigned proceeds to adjudicate the matter as In this appeal, the undersigned proceeds to adjudicate the matter as under: In Ground No. 1, the appellant challenged the action of the AO in denying the appellant challenged the action of the AO in denying deduction u/s 54 and in making an addition of 5,20,438/ deduction u/s 54 and in making an addition of 5,20,438/- - on account of long- term capital gain arising from sale of immovable property. term capital gain arising from sale of immovable property. As per record, it is seen that the appellant transferred the original capital asset As per record, it is seen that the appellant transferred the or As per record, it is seen that the appellant transferred the or on 04.04.2014 and thereafter claimed deduction under section 54 in respect of on 04.04.2014 and thereafter claimed deduction under section 54 in respect of on 04.04.2014 and thereafter claimed deduction under section 54 in respect of investment purportedly made in a new residential property. However, on perusal investment purportedly made in a new residential property. However, on perusal investment purportedly made in a new residential property. However, on perusal of the evidences furnished, it is noted that the appellant did not make the of the evidences furnished, it is noted that the appellant did not make the of the evidences furnished, it is noted that the appellant did not make the

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complete payment towards acquisition of the new residential property within a mplete payment towards acquisition of the new residential property within a mplete payment towards acquisition of the new residential property within a period of two years from the date of transfer of the original asset. The payment period of two years from the date of transfer of the original asset. The payment period of two years from the date of transfer of the original asset. The payment details available on record demonstrate that only part payments were made and details available on record demonstrate that only part payments were made and details available on record demonstrate that only part payments were made and the entire considerat the entire consideration was not discharged within the statutorily prescribed ion was not discharged within the statutorily prescribed period of 2 years. It is further noted that possession of the new residential property was not handed It is further noted that possession of the new residential property was not handed It is further noted that possession of the new residential property was not handed over to the appellant within three years from the date of transfer of the original over to the appellant within three years from the date of transfer of the original over to the appellant within three years from the date of transfer of the original capital asset. The appellant has not furnished any documentary evidence, either The appellant has not furnished any documentary evidence, either The appellant has not furnished any documentary evidence, either during the assessment proceedings or during the appellate proceedings, to during the assessment proceedings or during the appellate proceedings, to during the assessment proceedings or during the appellate proceedings, to establish that possession of the property has been obtained even subsequently. establish that possession of the property has been obtained even subsequently. establish that possession of the property has been obtained even subsequently. On the contrary, the appellant has st On the contrary, the appellant has stated that the construction was not completed ated that the construction was not completed and that the matter is pending before Court / RERA. This factual position remains and that the matter is pending before Court / RERA. This factual position remains and that the matter is pending before Court / RERA. This factual position remains uncontroverted. Section 54 of the I.T. Act, 1961 requires the assessee to purchase or construct a Section 54 of the I.T. Act, 1961 requires the assessee to purchase or construct a Section 54 of the I.T. Act, 1961 requires the assessee to purchase or construct a residential house within the sp residential house within the specified time limits. While judicial precedents have ecified time limits. While judicial precedents have held that delay in handing over possession by the builder may not, by itself, held that delay in handing over possession by the builder may not, by itself, held that delay in handing over possession by the builder may not, by itself, disentitle an assessee from claiming exemption, such relief has generally been disentitle an assessee from claiming exemption, such relief has generally been disentitle an assessee from claiming exemption, such relief has generally been granted in cases where the assessee had substan granted in cases where the assessee had substantially complied with the tially complied with the conditions of the section, particularly with regard to making the complete conditions of the section, particularly with regard to making the complete conditions of the section, particularly with regard to making the complete investment within the stipulated period. However, in the present case, the factual investment within the stipulated period. However, in the present case, the factual investment within the stipulated period. However, in the present case, the factual record shows that neither was the complete payment made within two years, nor record shows that neither was the complete payment made within two years, record shows that neither was the complete payment made within two years, was possession obtained within the said period, nor has any evidence been was possession obtained within the said period, nor has any evidence been was possession obtained within the said period, nor has any evidence been produced to demonstrate acquisition of the residential house even thereafter. produced to demonstrate acquisition of the residential house even thereafter. produced to demonstrate acquisition of the residential house even thereafter. In view of these facts, it is be held that the appellant failed to fulfill the conditions In view of these facts, it is be held that the appellant failed to fulfill the conditions In view of these facts, it is be held that the appellant failed to fulfill the conditions prescribed u/s 54. The judicial decisions relied upon by the appellant are d u/s 54. The judicial decisions relied upon by the appellant are d u/s 54. The judicial decisions relied upon by the appellant are distinguishable on facts and do not apply to a situation where the investment distinguishable on facts and do not apply to a situation where the investment distinguishable on facts and do not apply to a situation where the investment itself remained incomplete and the residential unit did not come into existence itself remained incomplete and the residential unit did not come into existence itself remained incomplete and the residential unit did not come into existence within the prescribed time frame within the prescribed time frame. Accordingly, on the basis of facts available on record and in the absence of Accordingly, on the basis of facts available on record and in the absence of Accordingly, on the basis of facts available on record and in the absence of evidence establishing compliance with the statutory requirements of section 54, evidence establishing compliance with the statutory requirements of section 54, evidence establishing compliance with the statutory requirements of section 54, the denial of deduction by the AO is found to be justified. The addition of Rs the denial of deduction by the AO is found to be justified. The addition of Rs the denial of deduction by the AO is found to be justified. The addition of Rs 5,20,438/- on acco on account of long-term capital gain is, therefore, upheld. term capital gain is, therefore, upheld. Accordingly, Ground No. 1 is hereby dismissed. Accordingly, Ground No. 1 is hereby dismissed.” 4. Before us, the assessee appeared in person and submitted Before us, the assessee appeared in person and submitted Before us, the assessee appeared in person and submitted that the investment in the new residential property had been made that the investment in the new residential property had been made that the investment in the new residential property had been made within the prescribed period, within the prescribed period, but completion of the project and but completion of the project and delivery of possession were delayed for reasons attributable to the delivery of possession were delayed for reasons attributable to the delivery of possession were delayed for reasons attributable to the builder. He produced the builder. He produced the allotment letter of the property issued allotment letter of the property issued

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in 2014 and and receipts evidencing payment receipts evidencing payments s made made to to the the builder/developer, as part of paper builder/developer, as part of paper book, which are placed on book, which are placed on record. He submitted that these documents were relevant for He submitted that these documents were relevant for He submitted that these documents were relevant for determining the eligibility of the claim under section 54, but had determining the eligibility of the claim under section 54, but had determining the eligibility of the claim under section 54, but had not been fully placed before the lower authorities. He, therefore, not been fully placed before the lower authorities. He, therefore, not been fully placed before the lower authorities. He, therefore, sought an opportunity for their co sought an opportunity for their consideration.

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being heard shall be afforded to the assessee. being heard shall be afforded to the assessee. We have expressed no We have expressed no opinion on the merits of the assessee's claim. The grounds are opinion on the merits of the assessee's claim. The groun opinion on the merits of the assessee's claim. The groun accordingly allowed for statistical purposes allowed for statistical purposes.

Order pronounced in the open Court on ounced in the open Court on 20/ /08/2026.

Sd/- Sd/- (ANIKESH BANERJEE ANIKESH BANERJEE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT Mumbai; Dated: 20/08/2026 /2026 Kunal Kr. P.S.

Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai