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2020 (12) TMI 660 - AT - Income TaxCorrect head of income - sale of plot of land - long term capital gains or income from other sources - gift given by four children to their mother - AO concluded that assessee was only a natural guardian of the immovable property and not joint owner of the property thereon, treated the amount received as ‘income from other sources’ - whether assessee would be entitled for deduction u/s.54/54F and 54EC of the Act if the aforesaid receipt is assessed as long term capital gains? - HELD THAT:- It is not in dispute that assessee had received ₹ 1,20,00,000/- directly from the purchaser i.e. Oricon Realty Pvt. Ltd., in view of the fact that she has signed the sale deed as consenting party. Alternative argument advanced by the ld. AR before us holds good that the said sum could at best be treated only as gift given by four children to their mother. We are in complete agreement with this. The receipt of money of ₹ 1.20 crores is a movable asset for which no registration is warranted. Even oral gift is permissible and it need not be deduced into writing especially when it is done amongst close family members as there are least chances to suspect the same. This observation made by us gets further strengthened in view of the undisputed fact that the total sale consideration paid by Oricon Realty Pvt. Ltd., for this subject mentioned property at Pisoli Village, Pune was ₹ 6 Crores only. In fact the ld. CIT(A) also in his appellate order categorically states that the total sale consideration of the property is only ₹ 6 Crores and there is absolutely no dispute over the same. Total sale consideration of the property of ₹ 6 Crores should be divided equally among the four children of the assessee i.e. Mrs. Asha Arun Gawli. It is not the case of the revenue that ₹ 1,20,00,000/- paid by Oricon Realty Pvt. Ltd., to the assessee i.e. Mrs. Asha Arun Gawli was over and above the total sale consideration of ₹ 6 Crores. Hence, it could be safely concluded that the amount received in the sum of ₹ 1,20,00,000/- by the assessee i.e. Mrs. Asha Arun Gawli would have to be treated as gift received by the assessee i.e. Mrs. Asha Arun Gawli from her four children in the interest of substantial justice and fair play. While making this decision, we are conscious of the fact that assessee had reported capital gains treating herself as one of co-owners in the subject mentioned property and had reported capital gains thereon. Since, we have held that the said receipt of ₹ 1,20,00,000/- is neither sale consideration on sale of property nor it could be taxed as income from other sources in her hands and it is only a gift received from 4 children which is exempt u/s.56(2) of the Act, the same would ultimately result in a situation where the assessed income becomes lower than the returned income. The total sale consideration of ₹ 6 Crores should be divided equally among four children @ ₹ 1,50,00,000/- each and cost of acquisition of the property also should be distributed equally among four children and indexation benefit to be given to them. The resultant long term capital gains arising in the hands of each children shall have to be recomputed accordingly after giving the benefit of exemption u/s.54 / 54F / 54EC of the Act depending upon the proof submitted therein by each of the children. The ld. AO is directed accordingly.
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