Where the assessee sells his residential property and reinvests the sale proceeds in purchasing another property which is registered under their parents’ name, but such investment is actually made by the assessee from his own bank account and subsequently, the property is gifted to the taxpayer by their parents, the assessee is held to be eligible for a deduction under section 54 of the Income Tax Act by invoking rule of purposive construction. (AY. 2016 -17)
Rajiv Ghai v. Asst. CIT [2024] 109 ITR 439 (Delhi)(Trib)
S. 54F : Capital gains -Profit on sale of property used for residence -Registered in the name of the parents -Payment made through assessee’s bank account -Registered property gifted to the assessee by parents -Rule of purposive construction -Deduction is allowed.[S. 45, 54]