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2014 (11) TMI 727 - AT - Income TaxAllowability of exemption against the sale of property u/s 54 Purchase agreement beyond one year before the date of sale or not Held that:- The assessee had purchased a residential flat on 08.01.1981, which was sold on 07.02.2007 for a sale consideration of ₹ 1,25,00,000 revenue was of the view that firstly, the purchase agreement for new flat on was 28.12.2005, which is beyond the period of one year before the date of sale and secondly, the purchasing of undivided share in the flat from the son does not amount to purchase of a flat; and therefore on these two counts, exemption u/s 54 is not available to the assessee - CIT(A) rightly held that the payment of purchase consideration to the extent of ₹ 5 lakhs which was made on 16.05.2006, falls within the period of one year before the date of sale of original flat and hence this amount is eligible for exemption u/s 54 - The other part of the ₹ 5 lakhs paid on 13.10.2005 was denied by him, as it was beyond period of one year - the finding of the CIT(A) is upheld. Whether purchasing of share of the son who is co-sharer in the flat amounts to purchase or not Held that:- In CIT Vs. T.N. Aravinda [1979 (10) TMI 1 - SUPREME Court] it has been held that the word purchase in section 54(1) had to be given a common meaning, that is, buying for a price or equivalent of a price on by payment in kind or adjustment towards debt or for other monitory consideration - the elder brother would be entitled to relief u/s 54(1) CIT(A) rightly held that Shri Gurdeep Singh, son of the assessee had made the payment of ₹ 1,22,38,750/-, towards the purchase consideration for the flat, which was reflected in his books of account and in his balance sheet before the date of sale of undivided share in the flat to his mother - The purchase agreement did not specify the shares of co-owners, that is, they are 1/3rd each - When the assessee had made the payment of ₹ 1,10,00,000/- to her son for purchasing of undivided share, it tantamount purchase only - the reasoning and the conclusion drawn by the CIT(A) is legally correct Decided against revenue.
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