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2022 (3) TMI 433 - AT - Income TaxDisallowance of deduction claimed u/s 54 - relevant date of taking possession of property - whether CIT(A) erred in not directing the learned AO to allow deduction u/s 54 on the ground that the appellant has made investment in constructed residential house within three from the date of sale of original residential property? - HELD THAT:- The purchaser/Assessee is put in possession only as a licensee and to that extent the purchaser/Assessee acquires interest in the premises/flat on entering into possession. Since by that date the purchaser/Assessee has already paid entire/majority of consideration for purchase, it can be said that the Assessee has, on the date of taking such possession, purchased the property for the purpose of Section 54 of the Act as has been held in that the case of CIT vs. Smt. Beena K. Jain [1993 (11) TMI 7 - BOMBAY HIGH COURT] wherein held that for the purpose of determining the date of purchase of new residential house the relevant date in the date when the petitioner paid the full consideration amount on the flat becoming ready for occupation and obtained possession of the flat. We are of the considered view that on the facts of the present case the date on which possession is by the Assessee (i.e. 02.04.2016) should be taken as the date of purchase. The requirement of the Section 54 is that the Assessee should purchase a residential house within the specified period and source of funds is quite irrelevant. Nowhere, it has been mentioned that the funds received as consideration from sale of original asset must be utilized for the purchase of the new residential house - See DR. PS. PASRICHA [2008 (1) TMI 649 - ITAT MUMBAI] Since the date of purchase falls within a period of 2 years from the sale of Original Asset (i.e. 21.05.2014), the Assessee is entitled to benefit under Section 54 of the Act. - Decided in favour of assessee.
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