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2013 (1) TMI 651 - PUNJAB & HARYANA HIGH COURTFamily arrangement - Capital gain on the compensation received - Whether the amount of compensation paid to the assessee to settle inequalities in partition represents immovable property and is not an income exigible to tax? - Held that:- As decided in R. Nagaraja Rao’s case (2012 (5) TMI 184 - KARNATAKA HIGH COURT) partition is not a transfer and adjustment of shares, crystallization of the respective rights in the family properties cannot be construed as a transfer in the eye of law. When there is no transfer of asset, there is no capital gain and consequently there is no liability to pay tax on capital gains. In view of the above payment of Rs.24 crores to Group A is to equalize the inequalities in partition of the assets of M/s Hind Samachar Ltd. The amount so paid is immovable property. If such amount is to be treated as income liable to tax, the inequalities would set in as the share of the recipient will diminish to the extent of tax. Since the amount paid during the course of partition is to settle the inequalities in partition, therefore deemed to be immovable property. Such amount is not an income liable to tax. Thus, the amount of owelty i.e. compensation deposited by Group B is to equalize the partition represents immovable property and will not attract capital gain. The argument that the assessee is liable to tax being interest on cash, suffice it to say, that such question or fact does not arise from the orders of the Tribunal - question of law is answered against the Revenue.
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