In the case of CIT v. R.L. Sood (108TAX27) the assessee who sold a residential house booked a flat with a builder and also paid certain amount. The assessing officer declined the exemption u/s 54 on the ground that the assessee has failed to purchase the flat within the stipulated period of one year. The assessee claimed that he had acquired substantial domain over the new residential flat within the specified period of one year and complied with the requirements of section 54. Merely because the builder failed to handover possession of the flat to the assessee within the period of one year, the assessee could not be denied the benefit of the said benevolent provision. The Commissioner (Appeals) also rejected the claim. The ITAT however favoured exemption u/s 54. Against a reference the Delhi High Court held that the assessees case falls under the Board Circular No. 471 dated 15.10.86 and therefore merely because the builder failed to handover possession of the flat to the assessee within the period of one year, the assessee cannot be denied the benefit of the said benevolent provision. In the circular the board has clarified that when the DDA issues the allotment letter to an allotee under the self financing scheme, on payment of the first installments of cost of construction, the allotee gets title to the property and such allotment should be treated as cost of construction for the purpose of capital gains.