A close look at the above said conditions show that there is enough scope for controversies in each of them. Sale of even depreciable asset held for more than 36 months and obtaining the status of long-term capital asset was held as eligible for tax exemption on re-investment (CIT v. Assam Petroleum Industries (P) Ltd (2003) 262 ITR 587 (Gau)).Obviously, owning residential houses in any other status is to be excluded while computing the number of houses for the purpose of this exemption.
When the net consideration is fully deployed in acquiring or building a residential house, whether section 50C could be applied is a recent controversy.
In Gouli Mahadevappa v. ITO (2011) 9 ITR (Trib) 129 (Bangalore), it was held that Section 50C and Section 54F operate in different fields. Section 54F cannot impede the operation of Section 50C and the proportion of actual net sale consideration so reinvested in residential house was held as eligible for exemption under Section 54F. Independent of the exemption under Section 54F, the deeming provisions contained in Section 50C will apply.
However, a contrary ruling could be found in Gyan Chand Batra v. ITO (2010) 45 DTR (JP) (Trib) 41 wherein it was held that ‘full value of consideration' as mentioned in Explanation to Section 54F(1) is not to be construed as having the same meaning as it is assigned in Section 50C.