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TMI Blog2000 (3) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... on under section 54(1) since the agreement of purchase was made within one year from the date of sale and since substantial parts of instalments were paid within two years from the date of sale and thereby treating the date of agreement as the date of purchase ?" The assessee had sold her flat at Rs. 1,40,000 on April 30, 1981. The assessee thereupon entered into an agreement on April 29, 1982, for purchase of ownership flat from Akash Deep Corporation for a sum of Rs. 1,40,000. As per the agreement, she had to pay Rs. 10,000 on or before the execution of the agreement and the balance amount she has to pay as under : Date of payment Amount (Rs.) 22-4-1982 10,000 25-3-1983 10,000 25-4-1983 10,000 4-6-1983 10,000 5-7-1983 10,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey is paid and possession has been taken within the stipulated period under section 54(1), the assessee is entitled to benefit under section 54(1). The provisions of section 54(1) of the Act provide that subject to the provisions of sub-section (2), where capital gain arises from the transfer of a long-term capital asset, the income of which is chargeable under the head "Income from the house property" and the assessee has within a period of one year before or two years after the date on which a transfer took place purchased, or has within a period of three years after that date constructed a residential house, then, instead of capital gain being charged to income-tax as income of the previous year in which the transfer took place, it sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is being constructed for her, that view may not be in conformity with the object behind the provision. The purpose behind this exemption is that when the assessee sells her residential house and if she purchased any new house or acquired the new house from those sale proceeds, the assessee is exempted from the capital gain tax. In J. H. Gotla's case [1985] 156 ITR 323 (SC), their Lordships at page 339 have observed as under : "Where the plain literal interpretation of a statutory provision produces a manifestly unjust result which could never have been intended by the Legislature, the court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a rational construction. The task ..... X X X X Extracts X X X X X X X X Extracts X X X X
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