Law:

Section:

Section 54F of the Income-tax Act, 1961 - Capital gains - Exemption of, in case of investment in residential house - Whether to claim benefit of section 54F, residential house which is purchased or constructed has to be of same assessee whose agricultural land is sold - Held, yes - Assessee - HUF sold its agricultural land in September, 1995 giving rise to a long-term capital gain - It claimed to have purchased a flat in a co-operative group housing society and, therefore, claimed benefit of section 54F - Admittedly, most of payments to co-operative society with regard to said flat had been made before one year of sale of agricultural land and amount invested for purpose of purchasing flat was not entire amount of capital gain but only a part of it and balance was not deposited in specified account in terms of sub-section (4) of section 54F - Whether since amount received from sale of agricultural land was not utilized for purchase of flat, assessee could not be said to have purchased a residential house within meaning of section 54F - Held, yes FACTS The assessee, an HUF, sold its agricultural land in September, 1995 giving rise to a long-term capital gain. The assessee claimed to have purchased a flat in a co-operative group housing society and, therefore, claimed the entitlement to the benefit of section 54F. Admittedly, allotment of the said flat was made in terms of the allotment letter dated 27-10-1998 and most of the payment to the co-operative society had been made before one year of the sale of the agricultural land. Further, the amount invested for the purpose of purchasing the flat was not the entire amount of the capital gain but only a part of it and the balance amount was not deposited in the specified account in terms of sub-section (4) of section 54F. All the three authorities, namely, the Assessing Officer, the Commissioner (Appeals) and the Tribunal declined the benefit of section 54F to the assessee. HELD The facts clearly showed that the amount, which was available to be taxed as capital gain, was not utilized for the purchase of the flat either one year before the sale of the agricultural land or two years after the sale of the agricultural…

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