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2022 (9) TMI 81 - ITAT AHMEDABADExemption of capital gains earned u/s 54F - delay in investment - purchase of flat in housing society as per MOU - delay in investment was for reasons beyond his control - Denial of claim on the premise of the investment of net consideration received in purchase of new residential house not having been made within the time period stipulated under section 54F - HELD THAT:- As we find that as per the facts before us, the delay in investment is of a very short period of five months that too for reasons beyond the control of the assessee, the intention of the assessee being all along to buy the new asset within the stipulated period. Therefore denial of exemption for this reason makes it a denial purely for technical reasons without considering the overall facts and circumstances of the case demonstrating the true spirit of the transaction. Assessee has sold his property on 1.12.2011 and he was required to purchase a new residential house for claiming exemption under section 54F of the Act by 31.11.2013. The conveyance deed for purchase of new property has been executed five months later i.e. on 3.5.2014. It is not disputed that after depositing the sale consideration in his capital gain account scheme in May 2012, by June, 2013 the assessee had finalized the property for purchase and entered into an agreement to purchase the same also, which transaction was finally executed on 3.5.2014. This establishes his true intention of investing in the new property all along. MOU for purchase of property clearly mentions that the occupants of the building in which a flat was purchased by the assessee had agreed to form and register a cooperative housing society which was still pending as on date of entering the MOU. That it was only in December, 2014, that the society was formed, and the Vendor was allotted share certificates, thus making his title to the property clear. And immediately thereafter, within three months of the formation of the society, the assessee got possession of his property and the entire consideration was also paid. These facts are not disputed by the Revenue. There is no iota of doubt that the delay in registration of the new property was for reasons beyond his control. We are in complete agreement with the assessee that the denial of exemption u/s 54 F in the present case is for a mere technical default in not getting the new property registered in his name within the stipulated time period of two years, as specified under section 54F of the Act, the consequent delay being minor delay of 5 months that too for reasons beyond the control of the assessee. The intention of the assessee all along was to invest in the new property well within the stipulated time and the delay was for reasons beyond his control and was too immaterial. Thus we hold that the assessee is entitled in law to claim exemption of capital gains amounting to Rs.1,08,69,338/- under section 54F of the Act and direct the AO to allow the claim of the assessee.
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