Sec. 54F – Capital gains exemption – Investment in residential plot for construction – Possession not handed over and construction not commenced within prescribed period due to reasons beyond assessee’s control – Subsequent surrender of plot and reinvestment in new residential property – Deduction allowable considering beneficial nature of provision.

5. [2025] 128 ITR(T) 246 (Delhi- Trib.)

Rajni Kumar vs. ITO

A.Y.: 2017-18

DATE: 17.09.2025

Sec. 54F – Capital gains exemption – Investment in residential plot for construction – Possession not handed over and construction not commenced within prescribed period due to reasons beyond assessee’s control – Subsequent surrender of plot and reinvestment in new residential property – Deduction allowable considering beneficial nature of provision.

FACTS

The assessee sold an immovable property and declared long-term capital gains, against which a deduction under section 54F was claimed on the basis of an investment made in a residential plot intended for construction of a house. The assessee had made substantial payments towards the purchase of the plot within the prescribed period.

However, possession of the plot was not handed over by the builder, and consequently, the assessee could not commence construction within the stipulated period. The delay was attributed to factors such as prolonged disputes relating to the Dwarka Expressway project, intervention by Government authorities, reg