Q740. Failure to comply with

provisions of Section 54

Question:Hello, I am an NRI living in New Zealand. I sold a property in India 3 years ago and to minimise the CGT I decided to buy a plot and build a house on it in Gurgaon with the sale proceeds. I booked the plot with a developer who was to give possession of that plot within 2 years from that date and remaining one year was to be utilised for the construction of the house to meet the three year requirement. It is now almost three years and builder has still not given me the possession of the plot so far. Under the circumstances, it is not going to be possible to build the in the required time frame. I have already made full payment for the plot, which is more than the capital gains achieved on sale of the property three years ago. In this situation what options are available to me and what would be the best course of action. Can I apply to Tax Office for an extension of time to build the house? Your urgent help would be greatly appreciated. Best Regards, Answer: You state that you have already made full payment for the plot and that amount exceeds the capital gains exemption. It is my understanding that on cases where delays have occurred and the benefit of section 54 denied due to such delays, on appeal, Tribunals have ruled that the benefit of such claims could not be denied for reason of delay in possession because of factors not in control of the assessee if the assessee had made the investment within the specified period. Consult an accountant to handle your return for you as he/she will be aware of rules and regulations regarding delays.