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2016 (1) TMI 903 - AT - Income TaxEntitlement for deduction u/s 54 - gift of the property so purchased to daughter - whether gift does not attract long term capital gain tax? - difference between gift and settlement u/sec. 47(i)(iii) - Held that:- The assessee being a father has settled the property in favour of his daughter out of love and affection without any consideration as referred at para 3 of settlement deed. As far as the settlement is concerned the assessee as a donor transferred the immovable property out of love and affection without consideration to the daughter done and same is not regarded as transfer of a capital asset under a gift, or will or an irrevocable trust does not attract long term capital gain as the provision of Sec 47(iii) of the Act. Hence, the gift does not attract long term capital gain tax. Coming to the exemption provisions of Sec 54 the assessee has complied with the provisions and the conditions laid down and the long term capital gains set-off with the cost of acquisition of new asset purchased in the same year but the issue arise whether the settlement or gift of such property claimed as exemption will call for addition on transfer within three years. After considering the elaborate submissions, judicial decisions followed, the assessee after availing exemption settled the property in favour of the daughter duly following the process of law. However, we make it clear that during the restriction period, the daughter shall not transfer the property by any means. At this stage we have no information about status of the property. Hence for limited purpose to examine the present status of the property, we remit the issue to the file of the Assessing Officer, and Assessing Officer shall provide adequate opportunity of being heard before deciding the issue. - Decided partly in favour of revenue
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