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TMI Blog2019 (12) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... the lease was for unlimited period. The perpetual lease holder / assessee has enduring right to possess and enjoy the property as residential house for unlimited period. According to the Ld. representative, the assessee also has the right to transfer the lease / possession to other person in the open market. Therefore, according to the Ld. representative, by virtue of Section 2(47)(vi) read with Section 269UA(2)(iii)(f) of the Act, it has to be construed as acquisition of the property, hence, the assessee is eligible for exemption under Section 54F of the Act. 3. On the contrary, Shri S. Bharath, the Ld. Departmental Representative, submitted that admittedly the assessee entered into an agreement for perpetual lease for unlimited period with M/s Mahindra Recidential Developers Limited and the property was not purchased outright by the assessee. According to the Ld. D.R., Section 54F, being a beneficial provision, only for purchase of property by means of outright sale, the exemption therein can be claimed. Therefore, according to the Ld. D.R., the Principal Commissioner has rightly found that there was an error in the order of assessment, which is prejudicial to the interests of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset, within a period of one year after the date of transfer of the original asset ; or(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset ; and(b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property". Explanation For the purposes of this section,- "net consideration", in relation to the transfer of a capital asset means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of two years after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xceeds(b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset,shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and(ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid. 5. The language employed by the Parliament is very clear that the assessee has to purchase within a period of one year before or after the date on which the transfer took place or the assessee has to construct a residential house within a period of three years after the sale of the property, capital asset. In this case, after the sale of the property, the assessee entered into a perpetual lease for an unlimited period. The assessee has every right to transfer the perpetual lease to third party in the open market and also has every right to continue in possession of residential house. Therefore, the question arises for consideration is whether the property acquired by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882). Explanation For the purposes of this sub-clause, a lease which provides for the extension of the term thereof by a further term or terms shall be deemed to be a lease for a term of not less than twelve years, if the aggregate of the term for which such lease is to be granted and the further term or terms for which it can be so extended is not less than twelve years; (ii) in relation to any immovable property of the nature referred to in sub-clause (ii) of clause (d), means the doing of anything (whether by way of admitting as a member of or by way of transfer of shares in a co-operative society or company or other association of persons or by way of any agreement or arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, such property. 6. A bare reading of Section 2(47)(vi) of the Act shows that the agreement or arrangement which has the effect of transferring or enabling the e ..... 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