The assessee sold a residential house on 27 -12 -2012 . The agreement of the new residential house was entered on 29 -10-2011 and the possession was received on 6- 1 -2012 . The assessee claimed the deduction u/s 54 of the Act . The AO rejected the claim on the ground that the agreement was entered in to on 29 -10 -11 (i.e.one year before the date of sale / transfer of the old residential house ). Order of the AO was affirmed by the CIT(A) . On appeal the Tribunal held that agreement was entered on 29 -10 -2011 and the substantial payment was made on same day however the possession was received on 6-1-2012 which fell within a period of one year before the date of transfer of the residential house (i.e. 27 -12 -2012). The appeal was allowed . Referred D.M .Dujod v.ITO ( ITA No. 4554/ Bom/1986 ) ( ITA NO. 6735 / 2019 dt. 19 -4 -2022)( AY. 2012 -13 )