TMI Blog1992 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) should have held that the appellant was not liable for any payment or long-term capital gain after giving exemption to the appellant under section 54 of the Act. " 3. The assessee is an individual. Her accounting year corresponding to the relevant assessment year ended on 30-4-1980. On 30-1-1980, the assessee entered into an agreement to sell 3/4th share of property situated at Bharatiya Friends Housing Co-op. Society for a consideration of Rs. 2,62,500. The capital gains arising out of the sale of the said property claimed to be exempt under section 54 of the Income-tax Act, 1961 (hereinafter called the Act). The assessee stated to have acquired another flat during the year. This flat bearing No. 132 in Maker Towers was occupied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the date of acquisition of flat in Maker Towers was 12-3-1974. According to Id. counsel, on that date the land on which building was to be constructed was underwater. This land was subsequently reclaimed and the construction was completed in 1979 only. The Municipal Corporation of Greater Bombay gave occupation certificate on 3-12-1979 and the assessee actually occupied it on 10-12-1979. Shri Harish, further, submitted that the prescription of section 54 requires the purchase of a flat. In 1974 the flat was not in existence. Therefore, it cannot be said that it was legally or physically acquired as on that date. The date of occupation falls within one year of the transfer i.e., 30-1-1980. Therefore, the ITO was not correct in disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew asset was purchased within the stipulated period. 8. One of the conditions to attract applicability of section 54(1) is that the assessee has either within a period of one year before or after the date of transfer purchased a house property for the purposes of his own residence or has within a period of two years from the date of the transfer constructed a house property for the purposes of his own residence. 9. According to Black's Law Dictionary (5th Edition, page 1110) the term 'purchase' includes any contract to purchase or otherwise acquire. The word is defined as transmission of property from one person to another by voluntary act and agreement founded on a valuable consideration. In technical and broader meaning relative to la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. The investment in house imply the payment of purchase consideration. Once the purchase consideration is paid, within the specified period, the assessee should be deemed to have complied with the requirement of the section, even if the legal ownership is not acquired. This is so because the assessee did his task and the delay which may result due to paper formalities cannot be attributed to the assessee and for this purpose the benefit of the section cannot be denied to him. In the present case, we find that the agreement for sale of original asset was entered into on 30-1-1980. In respect of new asset, agreement for purchase was entered into on 12-3-1974. Therefore, it is obvious that the act of purchase of the new asset was not within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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