Sh. Sanjeev Lal Etc. Etc vs Commissioner Of Income Tax ...

The Supreme Court addressed the applicability of Section 54 of the Income Tax Act, 1961, which provides exemption on long-term capital gains if the proceeds are reinvested in a new residential property. The Court held that the timing of the purchase of the new property is critical; since the appellants purchased the new house before the sale of the original property, they were not entitled to the exemption under Section 54. Consequently, the Court upheld the Assessing Officer's decision to tax the capital gains arising from the sale of the residential house.