a) Assessee earned capital gain on sale of a residential house property. He claimed exemption under section 54 in respect of investment made for purchase of a flat.
b) Assessing Oicer (AO) disallowed the claim of the assessee on ground that the assessee didn’t get the occupancy certificate of said flat with in the period of 2 years from the date of transfer of residential house property.
c) Appellate authorities allowed exemption to assessee. Aggrieved revenue filed the instant appeal before the High Court.
The High Court held in favour of assessee as under-
1) In the instant case, it was undisputed that assessee had made investment to purchase the flat within prescribed period of 2 years. However, he obtained occupancy certificate after 4 years and such delay was beyond his control.
2) The Madras High Court in the case of CIT v. Sardarmal Kothari  302 ITR 286 (Madras) held that in order to get the benefit under section 54, the assessee isn’t required to occupy the house property.
3) Hence, no exemption under section 54 could be denied to assessee where he had invested the money with prescribed time-limit and the occupancy certificate was delayed due to the reason which was beyond his control-  69 taxmann.com 95 (Bombay)