#Section 54F

The ITAT ruled that money spent on rebuilding an uninhabitable house can be treated as part of the purchase cost of a new residential property under Section 54F. This expands the pool of deductible expenses, allowing sellers of capital assets to claim a larger exemption on capital gains. Home-buyers and investors reinvesting sale proceeds in residential housing benefit.

ITAT Pune rules that substantial payment and possession transfer under an agreement to sell qualifies for Section 54F exemption, even if the sale deed is registered years later. This clarifies that formal registration delay does not invalidate the exemption claim, offering relief to taxpayers in similar transactions.

The ITAT Agra has ruled that the purchase price of a residential plot acquired within one year before selling a commercial asset can be included in the cost of acquisition for claiming capital gains exemption under Section 54F, provided documentary proof is submitted. This clarifies a critical ambiguity for investors restructuring assets and expands the scope of eligible investments beyond construction costs alone.

ITAT Delhi rules that depositing sale proceeds in Capital Gains Account Scheme (CGAS) and initiating partial construction are sufficient to claim Section 54F exemption, even for jointly owned property and despite court-imposed delays. The ruling clarifies that co-owners need not complete construction within the prescribed timeline to retain tax benefits, reinforcing a pragmatic approach to capital gains exemptions.

ITAT Mumbai rules that surrendering rights in a capital asset (via allotment letter) constitutes a 'transfer' under Section 2(47), making capital gains taxable under Section 45. This disqualifies additions under Section 69A for unexplained income and preserves Section 54 exemption eligibility for assessees.

ITAT Ahmedabad rules that investment in an under-construction residential property within the prescribed time limits under Section 54F qualifies for capital gains exemption, even if the payment was made prior to the sale of the original asset. This holding clarifies that the timing of possession or execution of the sale deed is not the sole determinant, provided the investment meets the statutory timeline.

ITAT Pune holds that full investment in residential property within stipulated period entitles deduction under Section 54F, even without full deposit in capital gains account scheme.