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2023 (5) TMI 354 - ITAT DELHICapital gain - transfer of capital asset u/s 2(47) - incidence of transfer of immovable property - transfer/ gift deed - HELD THAT:- As per recitals made in the transfer/ gift deed it is crystal clear that the said property was gifted by the assessee to his sister out of natural love and affection and it was in this back drop that the assessee claimed before the CIT(A) that the incidence of transfer of immovable property was not liable to tax in his hands. The claim of the assessee before the Ld. CIT(A) was lawful. Clause (iii) of section 47 of the Act exempts from the operation of section 45 all transfers under a gift or will or an irrevocable trust. Therefore, the transaction of gift under consideration is not to be regarded as transfer for the purposes of section 45. As held in the case of Gillanders Arbuthnot and Co [1968 (9) TMI 49 - CALCUTTA HIGH COURT] that the provision of section 47 have to be strictly construed which decision has been affirmed by the Hon’ble Supreme Court [1972 (9) TMI 13 - SUPREME COURT]. Therefore, the impugned transaction of gift is not exigible to capital gains tax. By no stretch of imagination the impugned gift of immovable property can be brought to tax in the hands of the recipient donee Smt. Manju Garg under section 56(2)(vii)(b). Firstly, the provision of section 56(2)(vii)(b) came into existence w.e.f. 01.10.2009 and therefore will apply for transaction undertaken on or after such date as explained by the CBDT in Circular No. 5 dated 03.06.2010. Proviso under section 56(2)(vii) says that this clause shall not apply to any property received from any relative. The expression ‘relatives’ under Explanation (e) to section 56(2)(vii) means ‘brother or sister of the individual’. Since the impugned transaction of gift of property is between brother and sister it falls outside the ambit of the provision of section 56(2)(vii)(b) of the Act. Therefore, the question of taxability of the impugned gift in the hands of the recipient donee Smt. Manju Garg does not arise at all. Invocation of section 50C to the case of the assessee is irrelevant as the said provision applies where there is under-statement of consideration in acquisition of property. There is nothing like that in the case of the assessee. Thus assessee’s case bringing to tax capital gain in the hands of the assessee is not sustainable. Decided in favour of assessee.
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