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Facts
The assessee sold a property and claimed exemption under Section 54 on reinvestment in a new residential property, which was purchased in his wife's name. The AO disallowed the exemption, citing reasons such as the property being in the wife's name, investment made after the due date, and incomplete construction.
Held
The Tribunal held that the investment made in the wife's name does not disqualify the assessee from claiming Section 54 exemption. The purchase of the vacant site was within the due time, and the subsequent construction, though delayed due to the assessee's foreign employment, was substantially completed. The Tribunal emphasized a liberal interpretation of Section 54.
Key Issues
Whether the claim for exemption under Section 54 is valid when the new residential property is purchased in the name of the spouse, and whether delays in construction completion due to external factors can deny the exemption.
Sections Cited
147, 144, 148A, 148, 142(1), 45, 54, 234A, 234B, 270A, 139(1), 54(2), 54B, 54D, 54EC, 54F, 54G, 54GA, 54GB, 80TTA
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Income Tax Appellate Tribunal, “C’’BENCH: BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the Income Tax Officer, Ward- International Taxation 1(2), Bengaluru dated 15.1.2025 vide DIN & Order No. ITBA/AST/S/147/2024-25/1072202882(1) passed u/s 147 r.w.s 144 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2018-19.
The assessee has raised the following grounds of appeal:
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 2 of 16
The brief facts are that the case of the assessee was reopened u/s. 147 of the Act after following the due procedure as envisaged u/s. 148A of the Act. Accordingly, notice u/s. 148 of the Act was issued to the assessee on 07/04/2022. In response to notice u/s.148 of the Act, the assessee did not file any return of Income however during the course of assessment proceedings, the assessee filed a computation of income declaring income from house property of Rs.59,535/- and interest from deposits in banks of Rs.60,557/- along with NIL capital gains after claim of cost of acquisition & deduction u/s 54 of the Act. The assessee in his computation of income had also claimed deduction u/s 80TTA of the Act and thus declared total income of Rs.1,10,090/-.The AO while completing the assessment proceedings had also considered the income declared by the assessee by way of furnishing the computation of income.
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 3 of 16 Subsequently, the notices u/s. 142(1) of the Act as well as show cause notices was issued on various dates seeking documents and information to which the assessee made part compliances.
3.1 The AO on going through the sale deed dated 15/12/2017 noticed that the assessee had sold an immovable property for a consideration of Rs 60,00,000/-. Further, the cost of acquisition as on 01/04/2021 amounting to Rs.12,16,500/- as per the valuation report submitted by the assessee was found to be in order by the AO. In view of the above facts, the long term capital gain as worked out by the assessee amounting to Rs.26,91,120/- after allowing indexed cost of acquisition of Rs.33,08,880/- was accepted by the AO.
3.2 Further, the AO noticed that the assessee had also claimed exemption u/s 54 of the Act amounting to Rs.26,91,120/- on account of investments made in new property and claimed taxable LTCG at Rs. NIL. The AO disallowed the assessee’s claim of exemption u/s 54 of the Act mainly for the following grounds which are enumerated below for ease of reference & convenience-
Sr No. Grounds For Rejection 1 The vacant land was registered in the name of the wife of the assessee, Dr Navya Mayigowda and not in the name of the assessee which was acquired by assessee’s wife prior to the date of transfer took place. 2 That the investment is made after the due date to file return of income u/s 139(1) of the Act; 3 The Assessee has purchased only a vacant site on 24/08/2017. 4 The Assessee has not made any investment in the Capital Gains Accounts Scheme as mandated under IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 4 of 16 section 54(2) of the Act. 5 The construction has not been completed within three years period i.e. within 31/07/2018.
3.3 The AO accordingly assessed the LTCG at Rs. 26,91,120/-. The AO passed the assessment order u/s 147 r.w.s. 144C(13) of the Act on a total assessed income of Rs. 28,01,210/- (LTCG of Rs.26,91,120 +1,10,090/- as declared by assessee in computation of income.)
Aggrieved by the assessment completed u/s. 147 r.w.s. 144C(13) of the Act dated 15.01.2025, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book as well as case law compilation in support of his case.
Before us, the ld. A.R. of the assessee CA Siddesh N Gaddi vehemently submitted that only dispute in the present case is with regard to the claim of Exemption u/s 54 of the Act amounting to Rs. 26,91,120/-. The AR of the assessee further submitted that the assessee had sold an immovable property for a consideration of Rs.60,00,000/- vide sale deed dated 15/12/2017 & invested the capital gain in the construction of residential house on a vacant land purchased in the name of his wife on 24/08/2017. The construction of the residential House was completed on 16/07/2022 and accordingly submitted that the condition of the section 54 of the Act was fulfilled by the assessee. It is submitted that the investment in new property was made in the name of assessee’s wife could not be a reason for disallowance of deduction u/s 54 of the Act to the Assessee. The same principle has been upheld by various co-ordinate benches of the Tribunal as well as Hon’ble High Courts. Further, the AR of the assessee submitted
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 5 of 16 that the amendment in section 139(1) of sixth Proviso, section 54, section 54B or section 54D or section 54EC or section 54F or section 54G or section 54GA or section 54GB were inserted by the Finance Act, 2019 which is effective from 01.04.2020, but the impugned case on hand is related to the AY 2018-19 & therefore the exemption u/s 54/54F can be claimed even without filling a return of income. Lastly the ld. AR submitted that the Assessee has invested an amount of Rs. 48,70,000/- in purchase of vacant site to be used for the purposes of construction which is far more than the amount of Long term capital Gain required to be invested & therefore there is no question of investing any amount in CGAS.
The ld. D.R. Dr. K J Divya CIT on the other hand supported the order of the AO and submitted that as the assessee had not satisfied all the conditions laid down under section 54 of the Act, the assessee is not eligible to claim exemption u/s. 54 of the Act. Further, the ld. DR submitted that as the vacant land was purchased in the name of wife of the assessee, the assessee is not eligible to claim exemption u/s 54 of the Act.
We have heard the rival submission and perused the material available on record. It is an undisputed fact that the assessee had sold his house property on 15/12/2017 for a total consideration of Rs. 60,00,000/-. It is also an undisputed fact that the cost of acquisition as on 01/04/2021 amounting to Rs.12,16,500/- as per the valuation report submitted by the assessee was found to be in order by the AO. Therefore, there is no dispute with regard to the long term capital gain as computed by the assessee amounting to Rs.26,91,120/-. Thus, the only dispute in this case is with regard to claim of deduction u/s. 54 of the Act amounting to Rs.26,91,120/-. The assessee claimed to have invested the amount for purchasing the vacant land in the name of his wife vide
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 6 of 16 purchase deed dated 24/08/2017 for an amount of Rs. 48,70,000/- (excluding other charges) i.e. approx three & half months back from the date of sale for the construction of the residential house. Further, the assessee had also commenced construction of a residential house on 03/07/2019 after obtaining the approval and the same was completed only on 16/07/2022 as the assessee was in employment in United Arab Emirates-Dubai with Geap Traders LLC since 2005. The assessee is deriving salary there from & the said foreign income was remitted to India at regular intervals for various purposes, including financing the purchase of plot and the construction of residential house. The main contention of the AO in disallowing the deduction u/s. 54 of the Act is that the assessee had purchased only a vacant site on 24/08/2017 that too in the name of his wife which is not permissible. Further, the assessee had not made any investment in CGAS as mandated u/s 54 of the Act in spite of the fact that the investment was made after the due date of furnishing the return. Lastly the construction had not been completed within three years i.e. within 31/07/2018.
7.1 Before proceeding further, it is apposite here to extract the relevant provisions of section 54 of the Act which is reproduced below for ease of reference and convenience: - Profit on sale of property used for residence. 54. (1) “[Subject to the provisions of sub-section (2), where , in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head “Income from House property” (hereafter in this section referred to as the original asset), and the assessee has within a period of [ one year before or two years after the date on which the transfer took place purchased], or has within a period of three years after that date [ constructed, one residential house in India], then], instead of the capital gain being charged to income-tax as income of the previous year in which the IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 7 of 16 transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) If the amount of the capital gain [is greater than the cost of the residential house] so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three year of its purchase or construction, as the case may be, the cost shall be nil’ or (ii) If the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain: Provided that……….”
On reading of the above section would make it explicitly clear that the capital gain on the sale of the property is to be utilized by the assessee within a period of one year before or two years after the date on which the transfer took place towards the purchase of residential house or within a period of three years after that in the construction of the residential house.
7.2 The jurisdictional High Court of Karnataka in the case of Commissioner of Income Tax, Bangalore v. Mrs. Shakuntala Devi reported in [2016] 389 ITR 366 has very thoroughly analyzed the provision of section 54 of the Act and held that utilization of capital gains in purchase/construction of residential house would suffice to claim the benefit of section 54 of the Act. The relevant paragraph are reproduced below for ease of reference & convenience :-
“11. A reading of the above Section would make it explicitly clear that proceeds of sale of the property is to be reinvested within a period of two years, which would IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 8 of 16 not be chargeable to tax. The intention of Legislature was to encourage the investment in the acquisition of residential house or construction thereof. The condition precedent for claiming benefit under said provision is that the capital gains realized from sale of a capital asset should be reinvested either in purchasing a residential house or utilised for constructing a residential building. If it is established that consideration so received on alienation of property has been invested in either purchasing a residential building or spent on construction of residential building, an assessee would be entitled to the benefit flowing from Section 54 of the Act irrespective of the fact that transaction not being complete in all respects. In other words, it has to be examined or discerned from the facts of each case as to whether the assessee had undertaken such an exercise or not? 12. The main purpose of Section 54 of the Act is to give relief in respect of profits on the sale of a residential house. Necessary conditions to be fulfilled for the applicability of Section 54 are: (i) Assessee should be an individual or a Hindu Undivided Family; (ii) Capital assets should result from the transfer of a long term capital asset; (iii) Capital gain must arise from transfer of building which is chargeable as 'income from house property'; (iv) Property should be a residential house; (v) Assessee must have within a period of two years after that date purchased another property; (vi) Property purchased must be residential; (vii) Exemption would be available only to the extent the sale proceeds are utilised; (viii) Where re-investment in a residential property is not made before due date for filing report, amount not so utilised till such date is required to be deposited in Capital Gain Account Scheme. Thus, if the above conditions are satisfied, assessee is entitled to claim benefit of the provision of Section 54.
Facts on hand would disclose that assessee had owned a flat at Mumbai and sold the same on 04.02.2003 for a total consideration of 1,70,00,000/-. Subsequent to such sale she entered into an agreement for purchasing another property for a total consideration of 3,25,00,000/- by agreement dated 08.09.2003. Said agreement came to be entered into within six months from the date of sale i.e., 04.02.2003 and assessee had paid a total consideration of 2,40,00,000/- between April' 2003 to September' 2003. After making the payment, a registered sale deed had not been executed in favour of the assessee before completion of two years period pursuant to Memorandum of Understanding dated 08.09.2003. The consideration received by her under sale dated 04.02.2003 has been paid by the assessee for purchasing another property and reinvestment has been made within two years as contemplated under Section 54 of the Act. These facts are not in dispute. Thus, long- term capital gains computed by virtue of sale deed stood adjusted by virtue of payment made by assessee for purchasing another property under Memorandum of Understanding dated 08.09.2003. As such, Tribunal has rightly held that date of purchase was to be taken as the basis for reckoning the period of two years prescribed under Section 54 of the Act for extending the benefit flowing therefrom. In the instant case consideration paid by assessee under IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 9 of 16 Memorandum of Understanding dated 08.09.2003 would fully cover the consideration of capital gains portion for being eligible to claim exemption under Section 54 of the Act.
14. Coordinate Bench of this Court in the case of PRINCIPAL COMMISSIONER OF INCOME-TAX vs. C. GOPALASWAMY reported in [2016] 384 ITR 307 (KAR) has held that utilization of capital gains in construction of residential house would suffice to claim the benefit of Section 54 of the Act.”
7.3 Further, it is worthwhile here to mention that the Hon’ble Supreme Court of India in the case of Commissioner of Income-tax v. T.N. Aravinda Reddy reported in (1979) 120 ITR 46hasheld that the ordinary meaning of word “purchase” is buying for a price or equivalent of price. The relevant Para is reproduced below for ease of reference &convenience:-
“3. We find no reason to divorce the ordinary meaning of the word "purchase as buying for a price or equivalent of price by payment in kind or adjustment towards an old debt or for other monetary consideration from the legal meaning of that word in section 54(1). If you sell your house and make a profit, pay Caesar what is due to him. But if you buy or build another subject to the conditions of section 54(1) you are exempt. The purpose is plain ; the symmetry is simple, the language is plain. Why mutilate the meaning by lexical legalism. We see no stress in the section on cash and carry." ……….”
7.4 The Hon’ble High Court of Delhi in the case of Balraj v. Commissioner of Income-tax reported in (2002) 254 ITR 22 has held that the section 54 speaks of purchase only and for availing benefit under this section it is not necessary that the assessee should become the owner of property by evidencing the registration thereof. The relevant findings are reproduced below for ease of reference & convenience- “3. The Assessing Officer, the appellate authority as well as the Tribunal rejected the claim of the assessee in respect of the assessment year 1975-76 on the ground that he did not become the owner of the property, as the said transaction was not IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 10 of 16 evidenced by registration thereof as provided under section 17 of the Registration Act. For the purpose of attracting the provisions of section 54, it is not necessary that the assessee should become the owner of the property. Section 54 speaks of purchase. Moreover, the ownership of the property may have different connotations in different statutes. The question which arises for consideration appears to be squarely covered by a decision of the Apex Court in CIT v. T.N. Aravinda Reddy[1979] 120 ITR 461 where it has been held that the word ‘purchase’ occurring in section 54(1) of the Act had to be given its common meaning, viz., buy for a price or equivalent of price by payment in kind or adjustment towards a debt or for other monetary consideration. Each release in this case was a transfer of the releasor’s share for consideration to the release and the transferee, the assessee, "purchased" the share of each of his brothers and the assessee was, therefore, entitled to the relief under section 54(1). The question now is no longer res integra having regard to the decision of the Apex Court in CIT v. Podar Cement (P.) Ltd. [1997] 226 ITR 6252. The Apex Court categorically held that section 22 of the Act does not require registration of sale deed. The meaning of the word ‘owner’ in the context of section 22 has been held to be a person who is entitled to receive income in his own right. The Apex Court in Mysore Minerals Ltd. v. CIT [1999] 239 ITR 7751 and this Court in CIT v. R.L. Sood [2000] 245 ITR 7272 have held that registration of the document is not mandatory for claiming depreciation on the property. In this view of the matter, we have no doubt in our mind that the learned Tribunal went wrong in holding that for the purpose of applicability of section 54, registration of document is imperative. We, therefore, answer the question in the negative, i.e., the assessee is entitled to exemption in terms of section 54.”
7.5 Further, the Hon’ble High Court of Karnataka in the case of CIT v. Sambandam Udaykumar reported in (2012) 345 ITR 389 has held that the provision of section 54 of the Act has to be construed liberally for achieving the purpose for which it was incorporated in the statute. The intention of the Legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 11 of 16 law. The words used in the section are purchased or constructed. For such purpose, the capital gain realized should have been invested in a residential house. The condition precedent for claiming benefit under the said prevision is the capital gain realized from sale of capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house. If after making the entire payment, merely because a registered sale deed had not been executed and registered in favour of the assessee before the period stipulated, he cannot be denied the benefit of section 54/54F of the Act. Similarly, if he has invested the money in construction of a residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle the assessee from claiming the benefit under section 54/54F of the Act. The essence of the said provision is whether the assessee who received capital gains has invested in a residential house. Once it is demonstrated that the consideration received on transfer has been invested either in purchasing a residential house or in construction of a residential house even though the transactions are not complete in all respects and as required under the law, that would not disentitle the assessee from the said benefit.
7.6 Now coming to the contentions of the AO that as the assessee had purchased the vacant land in the name of his wife & not in the name of the assessee, we are of the opinion that the investment in new property was made in the name of assessee’s wife could not be a reason for disallowance of deduction u/s 54 to the Assessee in view of the several decisions of the co-ordinate Bench of the Tribunal as well as High Court. Reliance is placed upon Simran Bagga vs ACIT [158 taxmann.com 265 (Delhi - Trib.) / [2024] 205 ITD 100 (Delhi - Trib.)[04-01 2024] where in it is held that where an IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 12 of 16 assessee, being a non-resident individual, sold a property in India and reinvested sale proceeds in purchase of a new residential property in name of her spouse, since sale proceeds had been duly invested in acquisition of new property within due time allowed, assessee was eligible for claim of deduction u/s 54 of the Act. The relevant extract of the above order has been reproduced below for ease of convenience & reference:
On this issue, we find that the proceeds have been the sale proceeds from the Delhi property had been credited to the same bank account prior to the new investment and the same proceeds have been utilized for purchase of new property. The Assessee submitted the documentary evidence in form of HDFC bank 8 statement and the payment receipt issued by the builder to substantiate that the investment has actually been made out of the sale proceeds of the Delhi property sold by the Assessee. It is also a matter of fact that as the Assessee was in UAE at the time of registry whereas Mr. Ajay Suri, spouse of the Assessee was in India. The registry of the plot for the new property was completed on 12 January 2021, when strict international travel restrictions were in place due to Covid 19. Therefore, the Assessee could not travel to India and the registry was completed in the name of Mr. Ajay Suri for the sake of convenience.
On this issue, we are guided by the various orders of the Hon'ble High Courts and the Tribunal which are as under:
(a) CIT v. Natarajan [2006] 154 Taxman 399/287 ITR 271 (Mad.) -The deduction under section 54 was allowed where the new residential property was purchased in the name of the wife of the assessee. (b) DIT, International Taxation v. Mrs. Jennifer Bhide [2011] 15 taxmann.com 82/203 Taxman 208/[2012] 349 ITR 80 (Kar.) – The Tribunal has allowed exemption u/s 54 for investment in residential property by the assessee jointly with her husband.
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 13 of 16 (c) Kamlesh Keswani v. Asstt. CIT [2023] 451 ITR 153 (Delhi)/W.P.(C) 13713/2022, CM APPL. 41874/2022 & CM APPL. 41875/2022 (Delhi HC) - Followed the judgment of Hon'ble Delhi High Court in the case of CIT v. Ravinder Kumar Arora [2011] 15 taxmann.com 307/203 Taxman 289/[2012] 342 ITR 38 (Delhi) (d) Mahadev Balai v. CIT [2018] 89 taxmann.com 334/402 ITR 117 (Raj.)/ITA 136/2017 (Raj HC) The Hon'ble High Court allowed exemption u/s 54B of the Act for investment made by the assessee in the name of his wife. (e) Shankar Lal Kumawat v. ITO [2021] 125 taxmann.com 347 (Jaipur - Trib.) - The assessee sold a residential house and invested sale consideration in purchase of a plot of land and carried out construction of a residential house thereon. The Hon'ble ITAT held that mere fact that investment in new property was made in name of his wife could not be a reason for disallowance of deduction under section 54 to assessee. (f) N Ram Kumar v. Asstt. CIT [2012] 25 taxmann.com 337/138 ITD 317 (Hyd. - Trib.) – The assessee purchased a flat in the name of her minor daughter and claimed deduction u/s 54F. The exemption was allowed by Hon'ble ITAT. (g) Krishnappa Jayaramaiah v. ITO [2021] 125 taxmann.com 110/189 ITD 15 (Bang.) - The assessee had invested sale consideration received on transfer of Capital Asset in purchasing a new residential property in name of his married widowed daughter and the exemption was allowed to the assessee. (h) Mrs. Kamal Murlidhar Mokashi v. ITO [2019] 110 taxmann.com 120/179 ITD 265 (Pune - Trib.)In order to claim deduction under section 54F, new residential house need not be purchased by assessee in his own name or exclusively in his name.
13. Further, we find that the Hon'ble Jurisdictional Delhi High Court in the cases of CIT v. Kamal Wahal [2013] 30 taxmann.com 34/214 Taxman 287/351 ITR 4 and CIT v. Ravinder Kumar Arora [2011] 15
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 14 of 16 taxmann.com 307/203 Taxman 289/[2012] 342 ITR 38, has held that new house purchased in the name of the spouse of the assessee was eligible for claiming deduction under section 54F. The provisions of section 54F are pari-materia with the provisions of section 54 of the Act and thus, the principle derived equally applies to section 54 as well. The Hon'ble Jurisdictional High Court has also held in the various judgments that Purposive construction is to be preferred as against the literal construction, more so when even literal construction also does not say that the house should be purchased in the name of the assessee only. Section 54F/54 of the Act are the beneficial provisions which should be interpreted liberally in favour of the exemption/deduction to the taxpayer and deduction should not be denied.
Hence, keeping in view, the entire facts of the case, since, the sale proceeds have been duly invested in acquisition of new property within the due time allowed, the assessee is eligible for claim of deduction u/s 54F.
In the result, the appeal of the assessee is allowed.”
7.7 We are of the considered opinion that the AO had erred in observing that the timeline provided under the statute for construction of property is 3 years from the due date of filing the return of income i.e. within 31.07.2018. The AO noted that the assessee had invested in vacant site (to be used for construction of residential house) wherein the value of investment is far more than the exemption claimed, had erred in observing that no investment has been made within the due dates prescribed u/s 139(1) of the Act. Since the assessee had invested an amount to the extent of Rs. 48,70,000 (excluding other charges) before the due date of filing the return, what is to be verified is whether the assessee had constructed a residential house on that vacant land or not. The assessee completed the house construction on 16/07/2022 as per
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 15 of 16 the completion certificate issued by the Corporation of Mysore city. Further, the deposit into Capital Gain Account Scheme(CGAS) does not arise in the case of the assessee as the assessee had already invested Rs. 48,70,000 (excluding other charges) before the due date of filing the return itself which is far more than the amount of the capital gain.
7.8 After taking into considerations the above judicial precedents & the facts of the present case, we are of the opinion that what is important to avail exemption is whether the assessee who received capital gains has invested in a residential house. Once it is demonstrated that the consideration received on transfer has been invested either in purchasing a residential house or in construction of a residential house even though the transactions are not complete in all respects and as requited under the law, that would not disentitle the assessee from the said benefit. We are also of the considered view that the inability to obtain the completion certificate from corporation of Mysore city within three years was due to the reasons beyond the control the assessee as the assessee being a Non-Resident & was employed in the United Arab Emirates- Dubai with Geap Traders LLC since 2005. The assessee is deriving salary there from & the said foreign income was remitted to India at regular intervals for various purposes, including financing the purchase of plot and the construction of residential house and therefore, we are of the considered opinion that failure of the assessee to get completion certificate was not attributable to any failure on the part of the assessee. In view of the Judicial precedents and the liberal interpretation of “purchase” in section 54 of the act, the exemption claimed u/s. 54 is justified and accordingly we direct the AO to grant exemption u/s 54 of the Act as claimed by the assessee.
IT(IT)A No.258/Bang/2025 HanchipuraChannaiah Nandakishore, Bangalore Page 16 of 16 8. In the result appeal filed by the assessee is allowed.
Order pronounced in the open court on 04th Nov, 2025