Tribunal held that in order to be eligible for the exemption under section 54 , the assessee should have substantially complied with section 54(1) . In this case, the assessee should have purchased the residential house within two years from October 19, 2015, i. e., the date of transfer. She had utilised such sum towards purchase of the new house on August 26, 2016 itself. Further, she had explained the reasons for not depositing the amount in the scheme. Since the assessee had substantially complied with section 54(1) , a mere non-compliance with a procedural requirement under section 54(2) itself could not stand in the way of the assessee getting the benefit under section 54 . Therefore, the assessee was entitled to exemption.(AY.2016-17)
ITO v. Rekha Shetty (Smt.) (2020) 184 ITD 38 / 81 ITR 1 (SN) (Chennai ) (Trib)
S. 54 : Capital gains – Profit on sale of property used for residence –
Depositing gains in capital gains accounts scheme before due date for filing return under Section 139(4) of the Act and purchasing new house within two years of transfer -Mere non-compliance with procedural requirement- Denial of exemption is not justified [ S.45 , 54(2) , 54F , 139(1) , 139(2) ]