Opinion Of Eminent Legal Luminaries On Controversial Issues

Whether Benefit Would Be Available U/s. 54F On Stamp Duty Valuation?

QUERY: A flat was sold. The AO adopted stamp duty value. The assessee invested full stamp duty value in another flat. Whether the assessee is entitled for deduction under section 54F?
ANSWER: The Karnatka High Court in Gauli Mahadevappa v. ITO [356 ITR 90] has held that where capital gain is assessed on notional basis under section 50C, whatever amount is invested in new residential house within prescribed period under section 54F would get benefit of deduction irrespective of the fact that funds from other sources are utilised for new residential house.

Further, in Raj Babbar v. ITO [56 SOT 1], the Mumbai Tribunal has held that if investment in new asset was more than net consideration received as well as full value of consideration computed as per section 50C, the assessee would be entitled for deduction.

On the basis of above decisions, the assessees is entitled for the amount invested in another flat under section 54F of the Act.
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