2001 (12) TMI 51 - HC - Income Tax

Summary

Issues involved: Interpretation of u/s 54 of the Income-tax Act for exemption eligibility based on property purchase timeline.

Summary:
The High Court of Delhi considered a case where the assessee sold a property and purportedly purchased another property within a year to claim exemption u/s 54 of the Income-tax Act. The question was whether the purchase transaction met the criteria of the Act. The Assessing Officer, appellate authority, and Tribunal rejected the claim citing lack of property ownership evidence through registration. However, the Court clarified that ownership is not a prerequisite for the term "purchase" under u/s 54. Referring to legal precedents, including CIT v. T. N. Aravinda Reddy and CIT v. Podar Cement Pvt. Ltd., it was established that registration is not mandatory for claiming exemptions under the Act. The Court held that the Tribunal erred in making registration a requirement for u/s 54 eligibility and ruled in favor of the assessee, granting exemption under the Act.

This judgment clarifies the interpretation of u/s 54 of the Income-tax Act regarding property purchase timelines and the significance of registration in claiming exemptions, emphasizing that ownership is not a determining factor for purchase eligibility under the Act.