Section 54 of Income Tax Act, 1961—Exemption u/s 54—In the instant case, revenue filed appeal against the order of ITAT on the following question—
“Whether in the facts and circumstances of the case, the Hon'ble ITAT was justified to hold that market value of flats should be considered as investment towards purchase/construction of new House property for purpose of 54(1) deduction computation, when the assessee had practically not made any payment in money terms or in kind towards the value of the flats and car space receivable from the builder?”

The assessee also claimed exemption under Section 54 of the Act pointing out that the allotment of the flats was in the nature of the assessee's investments in new residential property. The Assessing Officer did not accept the assessee's claim of exemption under Section 54 also noticing that the assessee had not included the value of the flats towards the total sale consideration received by the assessee.
The Tribunal was of the opinion that the exemption could not be denied to the assessee.

Held that—Tribunal notices that the assessee had received sale consideration partly in cash and partly in form of new flats to be constructed and to be allotted to the assessee. The Tribunal, therefore, correctly came to the conclusion that the assessee's investment in such new flats amounts to investment for acquisition of new residential house.

The Tribunal, therefore, correctly held that the Assessing Officer was not justified in disallowing the exemption under Section 54 of the Act. No question of law arises. Tax Appeal, therefore, dismissed.[PR. COMMISSIONER OF INCOME TAX-23 VERSUS MR. PETER SAVIO PEREIRA] [2018] [7] [ITCD Online] [83] [BOMBAY HIGH COURT]