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2019 (5) TMI 294 - AT - Income TaxNature of capital gain - long term vs short term - transfer of development rights acquired by assessee in pieces of land - execution of registered document happen subsequently - period of holding of rights - HELD THAT:- Whatever rights the assessee had acquired in the said pieces of land start from 1997, on which date for one of the transactions the amount was also paid through cheque of ₹ 6 lakhs. The said consideration of ₹ 6 lakhs was recognized in the later registered document which establishes the case of assessee of having acquired the rights way back in 1997. Accordingly, the gain arising on transfer of development rights in the hands of assessee is to be assessed as ‘Long term capital gains’. Denying deduction u/s 54EC - as per AO amount which was put into capital gains account has been transferred to some person - HELD THAT:- We hold that the assessee is entitled to the claim of deduction under section 54ED of the Act on account of investment in Bonds issued by Rural Electrification Ltd. and 54F of the Act on account of investment in construction of joint family property. The said claim of assessee cannot be rejected by the Assessing Officer observing that the amount which was put into capital gains account has been transferred to some person. The explanation of assessee in this regard was that the amount has been transferred to joint bank account of his brothers and himself, wherein the money was utilized for construction of joint ancestral house. We thus, direct the Assessing Officer to allow the said claim also in the hands of assessee. - Decided in favour of assessee.
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