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2014 (12) TMI 468 - AT - Income TaxTaxability of capital gains on the asset mortgage in discharge of dues, where assessee being a guarantor - Computation of LTCG on sale of shop – Transfer u/s 2(47)(i) – Held that:- A firm and a company in which the Assessee was a partner and director respectively had obtained financial assistance from banks and as a security for lending to the firm and company, Assessee had mortgaged the shop - on failure of the borrowers to repay the loans, the bank sold of the mortgaged shop and appropriated the dues - when any right in respect of any capital asset is extinguished and that right is transferred to someone, it would amount to transfer of a capital asset – following the decision in Commissioner of Income Tax Versus Attili N. Rao [2001 (10) TMI 5 - SUPREME Court] in a case where the property is mortgaged for securing the debt and subsequently, if the mortgagee sells the property and recovers the amount due to him and pays the balance of the sale price, if any, to the owner of the property, then, the 'gross amount' should be taken as the 'consideration' for computing capital gain in the hands of the owner of the property - thus, CIT(A) rightly held that asseessee being the legal owner has to be taxed for the capital gains arising from the sale of mortgaged shop – the order of the CIT(A) is upheld – Decided against assessee.
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