LTCG – Exemption u/s 54 – assessee and her husband purchased the new property in their son’s name – the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name.

LTCG – Exemption u/s 54 – assessee and her husband purchased the new property in their son’s name – HELD THAT:- The provisions of section 54 of the Act are beneficial and are to be considered liberally for reasonable bonafide cause but investment in residential property is mandatory which is not in dispute in this case. The Assessing Officer was not justified in rejecting the case law relied on by the assessee in the case of CIT v. Shri Kamal Wahal [2013 (1) TMI 401 – DELHI HIGH COURT] , wherein, it was held that the new residential house need not be purchased by the assessee in his own name nor is it necessary that it should be purchased exclusively in his name. Claiming exemption under section 54(1) of the Act deals with transfer of a long term capital asset being building or lands appurtenant, whereas, section 54F of the Act deals with transfer of any long term capital asset not being a residential house, but both are coming under computation of income from capital gains. From the observations of the Assessing Officer, it is evident that he has not appreciated the complete findings given

The issue is covered in favour of the assessee by the decisions of CIT v. Kamal Wahal [2013 (1) TMI 401 – DELHI HIGH COURT], CIT v. V. Natarajan [2006 (2) TMI 136 – MADRAS HIGH COURT] , CIT v. Gurnam Singh [2008 (4) TMI 28 – PUNJAB AND HARYANA HIGH COURT] and moreover, the decision of DIT v. Jennifer Bhide [2011 (9) TMI 161 – KARNATAKA HIGH COURT] . Under these facts and circumstances, the long term capital gains taxed by the Assessing Officer stands deleted.

Levy of short term capital gains – distress sale – AO proposed to adopt the guideline value as sale consideration as per section 50C – HELD THAT:- Admittedly, the provision of section 50C(1) of the Act reads as where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government [i.e., stamp valuation authority] for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessable shall, for the purpose of section 48 of the Act be deemed to be the full value of the consideration received or accruing as a result of such transfer. In this case, since the assessee has not opted for to refer her case for valuation to the Department Valuation Officer as per section 50C(2) of the Act, we are of the considered opinion that the Assessing Officer has rightly adopted the 50C(1) value as fair market value and determined the short term capital gain. – Decided against assessee

MRS. A. VIJAYAKUMARI VERSUS THE INCOME TAX OFFICER, WARD 1, THANJAVUR

I.T.A. No. 3435/Chny/2018 (Assessment Year: 2014-15)