The Income Tax Appellate Tribunal ( ITAT ), Pune bench has held that the date of possession of flat is the date of actual purchase for the purpose of claiming exemption under section 54F of the Income Tax Act, 1961.
The Assessing Officer denied an exemption under section 54F of the Income Tax Act, 1961 to the assessee on the ground that the sale deed was executed after one year of the sale of the old asset. The assessee claimed that since final consideration was paid and the possession of flat was received within a period of one year prior to the date of transfer of capital asset, the same should be considered as the date of purchase.
Before the Tribunal, the department contended that the date of execution of the agreement for the purchase of flat should be considered as the date of purchase.
The Tribunal noted that the assessee shall be conferred the title of property only on making full payment of consideration to the builder.
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“In the instant case, full consideration has been paid by the assessee for purchase of residential flat within a period of one year before the date of transfer of capital asset. Thereafter, actual possession of the flat was delivered to the assessee on 17.09.2010 i.e., within a period of one year prior to the date of transfer of capital asset. It is an un-rebutted fact that at the time of execution of an agreement, the residential property was not in existence. Therefore, taking into consideration facts of the case, the date of possession of flat is the date of actual purchase for the purpose of claiming exemption u/s 54F of the Act.”
Relying on a catena of decisions, the Tribunal allowed relief to the assessee.
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