CAPITAL GAINS

P1 Compute the capital gains in following independent cases Assessment year 2019-20.
a. Mr. A, a jewellery dealer, sells jewellery on 1.8.2018 for Rs.15,00,000, which was acquired on
10.8.15 for Rs.10,00,000.
b. Mr. B sells his personal furniture on 1.6.2018 for Rs.50,000, which was acquired on 1.4.2015 for
80,000. The expenses on transfer are 1% of selling price.
c. Mr. C sells his personal residential house on 1.12.2018 for Rs.15,00,000, which was acquired by
on 1.4.2017 for Rs.8,00,000. The expenses on transfer were Rs.22,000.
d. Mr. D sells gold bonds on 1.7.2018 for Rs.12.lakhs. The bonds were acquired on 1.3.2009,
Rs.8,50,000.
e. Mr. E, a painter, sells the drawings and painting made by him for Rs.50 lakhs on 1.10.2018.
f. Mr. A, a property dealer, sells a commercial plot of land on 1.8.2018 for Rs.35,00,000, which was
acquired on 1.8.2012 for Rs.10,00,000 for selling of offices constructed therein. He had incurred
land development charges of Rs.1,00,000 on 15.7.14.
g. Mr. B sells his personal motor car on 1.6.2018 for 1,00,000, which was acquired on 1.4.2012 for
Rs.3,00,000. The expenses on transfer are 1% of selling price.
h. Mr. C sells his personal residential house on1.5.2018 for Rs.30,00,000, which was acquired by
him on 1.4.2017 for Rs. 38,00,000. The expenses on transfer were Rs.15,000.
i. Mr. D sells an agricultural land situated in the village Rampur on 1.7.2018 for Rs.20 lakh. The
population of municipality under which the village Rampur is covered is Rs.9,000. The land was
acquired on 1.3.2015 for Rs.50,000.
j. Mr. E sells his gold bracelet on 1.5.2018 for Rs.4,00,000, which was acquired for Rs.20,000 on
1.9.2015. A diamond was fitted into that bracelet on 1.7.2017 for Rs.10,000.
k. Mr X purchased a building in jaipur for Rs.3,31,000 on 27.11.2002. He gifted the property to his
friend Y on 18.12.2018. Compute capital gains, if any, in the hands of Mr X or Mr Y.
l. Mr. F, a businessman, had acquired a painting for Rs.10 lakh and a drawing for Rs.5 lakh in the
year 2002-03. He sold the painting for Rs.20 lakh to a University and the drawing for Rs.1 lakh to
a National Museum on 5.8.2018.
Note :While painting/drawings are capital assets, but the transfer there of to a university/ national
museum is not regarded as ‘transfer’ i.e. such transfer is exempt u/s 47(ix). Hence, capital gains do
not arise.

P2 Mr. X sells his personal residential house on1.5.2018 for Rs.30,00,000, which was acquired by him
on 1.4.2014 for Rs. 18,00,000. The expenses on transfer were Rs.30,000.

P3 Shri Prabhat purchases a land in Jaipur for Rs.18,50,000 on 28.12.2003. He paid registration fees of
Rs.1,80,000. He constructed first floor on 10.12.2009 and spent Rs.12,80,000 on the said
construction.He sold this house on 15.10.2018 for Rs.94,50,000 . The expenses on transfer were
Rs.94,500. Compute his capital gain.

P4 Ramesh purchases a house property for Rs.16,50,000 on 28.12.1998. He paid registration fees of
Rs.1,65,000. The fair market value of the property as on 1st April 2001 was Rs.18,25,000. On
 15.12.2018 he sold this house for Rs.92,00,000. The expenses on transfer were Rs.92,000. Compute
his capital gain.

P5Mr X purchased a commercial building in Udaipur for Rs.5,31,000 on 27.11.2002. He gifted the
property to his friend Mr Y on 18.12.2007. On 15.12.2018 Mr Y sold this house for Rs.27,80,000.
The expenses on transfer were Rs.48,000. Compute capital gains in hands of Mr Y and state in which
year it shall be chargeable to tax.

P6 Mr. F sells a plot of land on 1.8.2018 for Rs.35,00,000. He inherited the plot from his father on
1.4.2007. His father had acquired the plot on 1.3.1998 for Rs.6,70,000. His father had incurred land
development charges Rs.30,000 on 31.3.1998 and Rs. 60,000 on 1.5.2004. Mr. F had incurred land
development charges Rs.50,000 on 1.9.2007. The sale expenses were 1% of the selling price. The
FMV of the plot as on 1.4.2001 was Rs.6,29,000. Compute the capital gains.

P7 Computation of capital gains in case of intangible assets: Mr.X, a manufacturer of bricks since 2005,
sells the following assets on 12.12.2018.

Name of asset Goodwill Trademark Tenancy rights in Manufacturing

respect of Licence
business premises
Mode of Self Purchased Self generated Purchased
Purchase price & N.A Rs.1,00,000 in 2016-17 Rs.30,000
date thereof 11.3.2016 12.12.2015
Cost of Rs.2,00,000, Rs.10,000 Rs.20,000 Nil
improvement 1.4.2011 1.5.2016 31.3.2017
and date thereof
Sale price 25,00,000 1400,000 500,000 200,000
Compute the capital gains for AY 2019-20. (Ans : 2500000, 1300000, 480000, 170000)

P8 A is a shareholder of X & Co. Ltd, holding 1,000 shares of the face value of Rs.10 each, allotted
at the time of the company’s incorporation in May, 2009. The company made its right issue in the
ratio of 1:1 on 15.7.2018 at a premium of Rs.40 per share . Instead of taking up the right, he
renounced it in favour of ‘B’ at a price of Rs.10 per share. What is the capital gain chargeable in
the hands of ‘A’? What will be the cost of the shares in the hands of B? (Ans :10000,60000)

P9 Mr. A is an individual carrying on business. His stock and machinery were damaged and
destroyed in a fire accident during june 2018.
 The value of stock lost (total damaged) was Rs.6,50,000.
 The opening WDV of the block of Machinery on 1.4.2018 was Rs.10,80,000.
During the process of the fire fighting operations, Mr. A lost his gold chain and a diamond ring,
which he had purchased in April, 2016 for Rs.1,20,000. The market value of these two on the date
of fire accident was Rs.1,80,000.
Mr. A received the following amounts from the insurance company.
 Towards loss of stock Rs.4,80,000.
  Towards damage of machinery Rs.6,00,000
 Towards gold chain and diamond ring Rs.1,80,000
You are requested to briefly comment on the tax treatment of the above three items under the
provisions of the Income tax act, 1961. Ans : Ded for 170000, STCL(480000), STCG 60000

P10 Mr A had acquired painting worth Rs.10 lakhs on 1.6.2010. On the same date, he inherited a
sculpture and a rare archaeological collection from his father. His father had acquired the
sculpture on 1.7.2007 for Rs.5 lakhs. His father had found the rare archaeological collection from
the earth underneath his house. He sells all the three things for Rs.20 lakhs each on 1.6.2018.
Compute the amount of capital gains chargeable to tax.
Hint :as the cost of rare archeological collection is not ascertainable, there can’t be any charge of
capital gains on it.

P11 A purchased 250 equity share of ABC Ltd on 1.4.2005 for Rs.270 per share and incurs
expenditure of Rs.500 on brokerage and share transfer fees. On 1.7.2009 he gets 200 bonus
shares. On 1.9.2012 he gets 300 right shares for Rs.140 per share. On 28.8.2018 he sells all the
750 shares for Rs.600 per share and incurs an expenditure of Rs.1,500 on brokerage. Compute his
taxable income for Assessment year 2019-20. He does not have any other source of income.

P12 X converts his plot of land purchased in July, 2009 for Rs.80,000 into stock-in-trade on 31st
March, 2018.The fair market value 31.3.2018 was Rs.190000. The stock in trade was sold
Rs.225000 in the month of January 2019. Find out the taxable income if any, and if so under
which ‘head of income’ and for which Assessment Year?

P13 X and Y formed a partnership firm. Just after formation of the partnership, X brought the
following assets into the firm on 15th July 2018 as his capital contribution:-

House Property (Rs.) Ornaments of Gold (Rs.)

Market value of the property on the 10,80,000 25,000
date of transfer
Amount recorded in the books of 9,00,000 36,000
firm
Actual cost/ FMV as on 1.4.2001 60,000 / 75000 15,000 / 20000
Year of acquisition 1994-95 2009-10

What tax consequences will Mr. X have to face in respect of the above transaction? What will be
your answer if Mr. X brings the above assets otherwise than by way of his capital contribution?

P14 The house property of X is compulsorily acquired by the Government for Rs.10,00,000 vide
Notification issued on 12th March 2016. X has purchased the house in 2006-07 for Rs.2,00,000.
The compensation is received on 15th April 2018. The compensation is further enhanced by an
order of the court on 5th April 2019 and a sum of Rs.2,00,000 is received as enhanced
 compensation on 25th May 2019. X wants to claim full exemption of the capital gains. Advise him
in this regard.
Compute the capital gains and determine the year in which it is taxable.

P15 Capital gains U/s 50 & 451 (1A) : The written down value of the block of assets of Rosy Ltd. as
on 1st April 2018 was Rs.5 lakh. An asset of the same block was acquired on 11 th May 2018 for
Rs.3 lakh. There was a fire on 18th September 2018 and the assets were destroyed by fire and the
assessee received a sum of Rs.11 lakh from the insurance company. Compute the capital gain
assuming:
(i) All the assets were destroyed by fire; and
(ii) Part of the block of assets was destroyed by fire;
What will be the answer if assessee received Rs.6 lakh from insurance company instead of Rs.11 lakh?
Ans : 300000, 300000, (200000)

P16. X sold his vacant site on 30.09.2018 for Rs.7,00,000. It was acquired by him on 1.10.2001 for
Rs.1,50,000. The State stamp valuation authority fixed the value of the site at the time of transfer
at Rs.13,00,000. Compute capital gains in the hands of X and your reasons for computation.

P17. A house was purchased on 1.5.2005 for Rs.2 lakhs and was used as a residence by the owner. The
owner had contracted to sell this property in June 2008 for Rs. 8 lacs and had received an advance
of Rs.50,000 towards sale. The intending purchaser did not proceed with the transaction and the
advance was forfeited by the owner. The property was sold in July 2018 for Rs.10,00,000. The
owner, from out of sale proceed, invested Rs.3 lakhs in new residence in December 2018.
Compute the net taxable capital gains.
P17A A house was purchased on 1.5.2005 for Rs.2 lakhs and was used as a residence by the owner. The
owner had contracted to sell this property in June 2016 for Rs. 8 lacs and had received an
advance of Rs.50,000 towards sale. The intending purchaser did not proceed with the transaction
and the advance was forfeited by the owner. The property was sold in July 2018 for Rs.10,00,000.
The owner, from out of sale proceed, invested Rs.3 lakhs in new residence in December 2018.
Compute the net taxable capital gains.

P18 Mr X furnishes the following particulars for the previous year ending 31.3.2019, and request you
to compute the taxable capital gain;
(i) He had a residential house inherited from father in 1999, the fair value of which as on
1.4.2001 is Rs.15,00,000.
(ii) In the year 2005-06, further construction and improvements costed Rs.6 lakhs.
(iii) On 10.5.2018 the house was sold for Rs.70 lakhs. Expenditure in connection with transfer
Rs.70,000.
(iv) On 20.12.2018, he purchased a residential house for Rs.15 lakhs.

P19. X owned a residential house at Madurai, the original cost of which was Rs.1,00,000. It was
acquired on 1.9.2004. He sold the house on 1.6.2009 for Rs.8,00,000 and deposited the amount of
Capital Gain in CGDS on 15-7-10 , purchased another house on 31.5.2011 at Tiruchi out of
 deposit in CGDS for Rs.6,00,000. The second house at Tiruchi was sold by him for Rs.12,00,000
on 30.5.2018. Discuss the impact of these transactions with regard to assessment to capital gains.

P20 Ms X sold a residential building at Jodhpur for Rs.18,00,000 on 1.7.2018. The building was
acquired for Rs.1,50,000 on 1.6.1999. FMV as on 1/4/2001 is 250000. She paid brokerage @ 2 %
at the time of sale of the building. She invested Rs.7 lakhs in purchase of a residential building in
December 2018 and deposited Rs.2 lakhs in NHAI Capital Gains Bond in March, 2019. Compute
her taxable capital gains for the assessment year 2019-20.
P20A Ms X sold a residential building at Jodhpur for Rs.18,00,000 on 1.10.2018. The building was
acquired for Rs.1,50,000 on 1.6.1999. FMV as on 1/4/2001 is 250000. She paid brokerage @ 2 %
at the time of sale of the building. She invested Rs.7 lakhs in purchase of a residential building
and deposited Rs.2 lakhs in NHAI Capital Gains Bond in March 2019. Compute her taxable
capital gains for the assessment year 2019-20.

P21 Mr X furnishes the following particulars and requests your advise as to the liability in capital gains
for the assessment year 2019-20. You may take suitable assumptions.
1. Jewellery purchased by him on 10.3.2010, for Rs.1,05,000 was sold by him for a consideration
of Rs.2,85,000 on 2.11.2018.
2. He incurred expenses:
(a) At the time of purchase Rs.2,000.
(b) At the time of sale (for brokerage) Rs.4,000
He invested Rs.70,000 in bonds with National Highway Authority of India out of sale
consideration
On these facts:
(a) Compute the capital gains chargeable to tax.
(b) Whether Mr X would be entitled to any exemption?

P22 Mr. ‘X’ furnishes the following data for the previous year ending 31.3.2019.
(a) Equity Shares of AB Ltd. 10,000 in numbers sold on 31.5.2018, at Rs.350 for each share.
(b) The above shares of 10,000 were acquired by ‘X’ in the following manner.
(i) Received as gift from his father on 1.6.2000 (5,000 shares) the market price on 1.4.2001
Rs.50 per share.
(ii) Bonus shares received from AB Ltd on 21.7.2008 (2,000 shares)
(iii) Purchased on 1.8.2009 at the price of Rs.125 per share (3,000 shares)
(c) Purchased one residential house at Rs.25 lakhs on 1.9.2018 from the sale proceeds of shares.
(d) “X’ is already owning a residential house, even before the purchase of above house.
You are required to compute the taxable capital gain. He has no other source of income chargeable to
tax.

P23 X owns a residential house, which is self occupied, and also a plot of land (He has no other
house). He sells the house on January 3, 2019 and the plot on February 15,2019 for Rs.11,50,000
and Rs 8,00,000 respectively. The house was purchased on January 30, 2010 for Rs.4,00,000 and
the plot on March 30, 2009 for Rs.2,00,000. A has purchased a new residential house on April 25,
2019 for Rs.5,00,000 and claims exemption in respect of such house. On 31.1.2020, he transfer
 the said residential house for Rs.7,50,000 and purchase a new house on 31.5.2020 for
Rs.10,00,000. Compute the capital gains for relevant years.

P24 Section 54GA: Mrs Malini Hari Shifted her industrial undertaking located in corporation limits of
Faridabad, to a Special Economic Zone (SEZ) on 1.12.2018.
Amt. in Rs.
(a) Land: Purchased on 20.1.2005 400000
Sold 2800000
(b) Building (Construction completed on 14.3.2008), WDV 820000
of building as on 1.4.2018
Sold 1139000
(c) WDV of cars as on 1.4.2018 740000
Sold for 600000
(d) Expenses on shifting the undertaking 115000
(e) Assets acquired for the undertaking in the SEZ (on or
before 25.6.2018)
(i) Land 400000
(ii) Building 500000
(iii) Computer 100000
(iv) Car 320000
(v) Machinery (Second hand) 200000
(vi) Furniture 50000

There is no intention of investing in any other asset in this undertaking.

Compute the exemption available under section 54GA for the assessment year 2019-20.

P 25 Mr. A sold his residential House on 21.10.2018 for 100 lakhs and paid brokerage @ 1% of sale
price. He had purchased the said property in May 2001 for 24,50,000. In June, 2019, he invested
77 lakhs in equity of A (P) Ltd., a newly incorporated SME manufacturing company, which
constituted 60% of share capital of the said company. A (P) Ltd. utilized the said sum for the
following purposes –
(a) Purchase of new plant and machinery during July 2019 - 70 lakhs, which includes :

 3 lakhs for purchase of computers,

 4 lakhs for purchase of a plant carries 100% Depr
 8 lakhs for purchase of cars;
 1 lakh for purchase of Air-conditioners installed at the Guest House.
(b) Amount deposited in specified bank on 28-9-2019 - 15 lakhs.
Compute the chargeable capital gains for the A.Y. 2019-20. Assume that Mr. A is liable to file his
return of income on or before 30th September, 2019 and he files his return on 29.09.2019.
P26 Mr T inherited a house in Jaipur under will of his father in May, 2008. The house was purchased
by his father in January, 1980 for Rs.2,50,000. He invested an amount of Rs.7,00,000 in
construction of one more floor in this house in June, 2010. The house was sold by him in
November, 2018 for Rs.37,50,000. The valuation adopted by the registration authorities for
charge of stamp duty was Rs.47,25,000 which was not contested by the buyer, but as per
assessee’s request, the Assessing Officer made a reference to Valuation Officer. The value
determined by the Valuation Officer was Rs.47,50,000, Brokerage @ 1% of sale consideration
was paid by Mr. T to Mr.S The market value of house as on 1.4.2001 was Rs.2,70,000.
You are required to compute the amount of capital gain chargeable to tax for assessment year 2019-20

P27 On 23rd December 2018, Rajat sold 500 grams of gold , the sale consideration of which was
Rs.2,50,000. he had acquired this gold on 20th August 1997 for Rs.40,000. Fair market value of
500 grams of gold on 1st April 2001 was Rs.36,000. Find out the amount of capital gain
chargeable to tax for the assessment year 2019-20. Also calculate the tax liability. Mr. A who
transfers land and building on 2.11.2018, furnishes following information:
(i) Net consideration received Rs.20 lakhs.
(ii) Value adopted by stamp valuation authority, which was not contested by Mr. A Rs.22.5
lakhs.
(iii) Value ascertained by Valuation Officer on reference by the Assessing Officer Rs.23
Lakhs.
(iv) This land was distributed to Mr. A on the partial partition of his HUF on 1.4.1990. Fair
market value of the land as on 1.4.2001 was Rs.110,000.
(v) A residential building was constructed on the above land Mr. A at a cost of Rs.320,000
(construction completed on 1.12.2007) during the financial year 2007-08
(vi) Short term capital loss incurred on sale of shares during the financial year 2007-08
Rs.2,05,000.
Mr. A seeks your advice as to the amount to be invested in NHAI bonds so as to be exempt from
clutches of capital gain tax.

P28 Mr. Malik owns a factory building on which he had been claiming depreciation for the past few
years. It is the only asset in the block. The factory building and land appurtenant thereto were
sold during the year. The following details are available:
(Amount in Rs.)
Building completed in September 2009 for 10,00,000
Land appurtenant thereto purchased in April 2008 for 12,00,000
Advance received from a prospective buyer for land in May, 50,000
2009, forfeited in favour of assessee, as negotiations
failed
WDV of the building block as on 1.4.2018 8,74,800
Sale value of factory building in November 2018 18,00,000
Sale value of appurtenant land 26,00,000
The assess is ready to invest in long term specified assets under section 54EC within specified
time.Compute the amount of taxable capital gain for the assessment year 2019-20 and the amount
to be invested under section 54EC for availing the maximum exemption.

P29 X purchased 1000 listed equity shares of Rs.10 each at Rs.100 per share from a broker on 4 th
May, 2008. He paid Rs.3,000 as brokerage. On 15th March, 2018, he was given bonus shares by
the company on the basis of one share for every two shares held. On the same date, he was also
given a right to acquire 1000 rights shares @ Rs.90 per share. He acquired 50% of the rights
shares offered and sold the balance 50% of the right for a sum of Rs.67,500 on 7th April 2018.
The rights shares were allotted to him on 30th April 2018. All the shares held by him were sold on
24th September 2018 @ Rs.280 per share through a recognized stock exchange. compute capital
gain and tax assuming his income from other sources is Rs.40,000.

P30 Capital gains & Total Income: Mr Y submits the following information pertaining to year ended
31rd March 2019.
(i) On 30.11.2018, when he attained the age of 60, his friends in India gave a flat at Surat as a
gift, each contributing a sum of Rs.20,000 in cash. The cost of flat purchased using various
gifts was Rs.3.4 lacs.
(ii) His close friend abroad sent him a cash gift of Rs.75,000 through his relative, for the above
occasion.
(iii) Mr. Y sold the above flat on 30.12.2018 for Rs.3.6 lacs . The Registrar’s valuation for stamp
duty purposes was Rs.3.7 lacs. Neither Mr. Y nor the buyer, questioned the value fixed by the
Registrar.
(iv) He had purchased some equity shares in X Pvt. Ltd. on 5.2.2018 for Rs.3.5 lacs. These shares
were sold on 15.3.2018 for Rs.2.8 lacs.
You are requested to calculate the total income of Mr. Y for the assessment year 2019-20.

P31 Capital gains tax on capital indexed bonds: Mrs. K had purchased 40 capital indexed bonds listed
in recognized stock exchange of Rs.10,000 each on 1.4.2009. She sold all the bonds @ Rs.15,250
on 28th September 2018. She invested Rs.80,000 in bonds of NABARD on 1.11.2018 and
Rs.70,000 in the bonds National Highway Authority of India on 31st March 2019. Compute the
tax liability of Mrs. K assuming that she has no other income chargeable to tax.

P32 Rajesh, a director at Rajesh Pvt Ltd., Mumbai, carrying on business has submitted the following
particulars of his income for the assessment year 2019-20. Compute the taxable income and tax
payable:-
(1) Director’s remuneration and perquisites:
o Remuneration @ Rs.11000 p.m. : Rs.132000
o Free use of car of engine capacity of 1500 cc provided by the company.
o The company has provided rent free accommodation (unfurnished) to Rajesh at Mumabi.
It is ascertained that for this purpose the company has obtained a flat on lease from Prem
Ltd. for which the company pay a rent of Rs.40,000 p.a., which is also the fair rental
value.
 o Medical expenses met by the company on an ordinary treatment of Rajesh and the
member of his family Rs.4,500.
(2) Rajesh was occupying a bungalow on rent at New Delhi since November 1986. He
agreed to transfer his tenancy right in the said bungalow in favouyr of Bala Ltd. for a sum
of Rs.2,00,000 payable as follow:-
(a) Rs.50,000 in cash.
(b) A flat valued at Rs.150000 (at cost) in the new building to be put up by Bala Ltd. to be
allotted free of cost. The cash payment was made on 5th April 2018 and the flat allotted to
him on 5th October 2018 which was kept for his own residence from that date.

Mrs. Madhu Kaul v. CIT & Another [2014] Assessee was allotted a fiat on 7-6-1986 by a
letter conveyed on June 30°’, 1986. For the said property, she paid the first instalment on 4-
7-1986. However, the possession of flat to assessee was delivered on November 30th 1988.
She sold this flat on 5-7-1989. While filing the return of income for the assessment year
1990-91, she treated the capital gain as long-term capital gain.
However, the Assessing Officer treated the gain in arising from sale of flat as short-term
capital gain. Both the Commissioner (Appeals) and the Tribunal upheld the order of the
Assessing Officer. Allotment of flat took place on 7-6-1986 vide letter dated 30-6-1986. The
assessee paid the first instalment on 4-7-1986, which conferred a right upon the assessee
to hold the flat, although the actual possession was delivered on a later date. Therefore, the
assessee had rightly considered the capital gain as long-term capital gain as the period of
holding would be considered starting from the date of allotment.

Bharti Gupta Ramola v. CIT[12012] While computing the period of holding, the date on which
asset is acquired and the date on which asset is transferred is to be included in the period of
holding.

CIT v. Enam Securities P. Ltd. [2012] Non cumulative redeemable preference shares could
not be equated with debentures or bonds, therefore, assessee would be entitled for benefit of
indexation under section 48.

CIT v. Yatish Trading Co. Pvt. Ltd. [2013] If assessee converts his shares which were held as
stock in trade into investments, then on the date of sale of investments the difference between
the selling price and the market value of the investment that existed as on the date of
conversion would be assessable as income from capital gains arid not as business income.
Profit arising up to the date of conversion would be assessed as business income by taking the
difference between fair market value as on the date of conversion and the cost of acquisition.

CIT v. Ms. Jagriti Aggarwal [2011] Assessee will be entitled benefit of exemption even if
he deposits the amount of capital gains in CGAS before the time allowed to furnish the
return of Income i.e. time allowed under section 139(4). Assessee sold her house property
for 45 lakhs on 13-01-2006 and purchase a new residential house property on 02-01-2007 and
claim deduction under section 54 of Income-tax Act. if assessee utilise capital gains for
purchase of residential property or deposit in capital gains account scheme before the due date
of filing return of income under section 139(4), then he will be entitled exemption.

Sanjeev Lal 2. Smt Shail Moti Lal v. CIT and another [2014] Exemption under section 54 of
the Income-tax Act, 1961 would be available to assessee where assessee had executed an
agreement to sell in respect of a house property, and had purchased a new residential property
within 1 year from date of agreement to sell but could not execute sale deed within prescribed
time due to an order passed by competent court A valid transfer takes place within meaning of
section 2(47) of Income-tax Act, 1961 even by executing agreement to sell.

CIT v. Kamal Wahal [2013] Exemption under section 54F would be available to the assessee in
regard to investment made in the residential house property acquired in the name of
spouse of assessee.

CIT v. Gita Duggal [2013] Deduction under section 54 or under section 54F would be available
even if the residential house consists of several independent units, having separate
entrances. The expression used in the section is “residential house” not “residential unit”.

CIT v. Ashok Kumar Raihan [2014] Where an assessee sells his long term capital asset and
then purchases an old house, demolishes it and re-construct a new house within the time
limit i.e. three years, then in such a case assessee shall be eligible to the benefit of
section 54F of the Income-tax Act, 1961.