Sec. 54 relief applicable even if description of property was mentioned as ‘land’ in sale deed: ITAT

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  • Last Updated on 3 May, 2022

Income-tax Act 1961; Capital gain; Profit on sale of property used for residence (General);

Case Details: Charu Agarwal v. DCIT - [2022] 137 283 (Delhi - Trib.)

Judiciary and Counsel Details

    • R. K. Panda, Accountant Member and Ms. Suchitra Kamble, Judicial Member
    • Rakesh Garg, Adv. for the Appellant. 
    • M.K. Jain, Sr. DR. for the Respondent.

Facts of the Case

Assessee was an individual and non-resident of India. She had sold a residential house and claimed long-term capital gain exemption after purchasing a new residential house property under section 54.

During assessment proceedings, the Assessing Officer noted that at the time of execution of the sale deed, the assessee had described the property as a plot. Thus, he denied the exemption claimed by the assessee under section 54.

On appeal, the Commissioner (Appeals) allowed the claim of exemption under section 54F instead of section 54 and also restricted the claim of exemption. Aggrieved-assessee filed the instant appeal before the Delhi ITAT.


The Delhi Tribunal held that AO denied Section 54 exemption on the ground that the sale deed had described the property as a plot. It should be noted that the assessee had furnished a copy of the valuation report by the registered valuer who valued the property after inspection and the assessee had also filed house tax and water tax receipts, etc. to evidence that the property that sold was a building along with land and not only land.
Merely because in the sale deed and agreement to sell the description of the property was mentioned as land, the same couldn’t go against the assessee to deny the benefit of deduction under section 54.

Thus, the assessee was entitled to claim the benefit of deduction under section 54 on account of the sale of property and subsequent investment in residential property.

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