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2016 (1) TMI 897 - ITAT MUMBAI

2016 (1) TMI 897 - ITAT MUMBAI - TMI - Denial of claim of deduction u/s 54EC - short term capital gain or long term - inclusion of period of holding of the previous owner - inherited property - Held that:- It has been clarified by way of explanation, the expression ‘previous owner of the property’ in relation to any capital asset owned by the assessee means the last previous owner of the capital asset, who acquired it by a mode of acquisition other than that referred to in clause (i) or clause ( .....

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of the assessee.

In fact, the assessee did not inherit the property directly from her grandmother but from sons and daughters of grandmother. Even as per the provision of the Act, it is the cost of the “previous owner” which has to be reckoned, thus, in view of section 2(45A) of the Act r.w. Explanation-1 and the circumstances mentioned in section 49(1) of the Act, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquir .....

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effected almost within a period of 2 years. In this case, the “previous owners” are sons and daughters of Smt. Kantaben Shah (grandmother) and from whom the property came to the assessee. The property directly did not come to the possession of the assessee from the grandmother, therefore, the stand of the ld. Commissioner of Income Tax (Appeals) is affirmed. - Decided against assessee. - ITA NO.5756/Mum/2012 - Dated:- 5-11-2015 - Shri Joginder Singh, Judicial Member, and Shri Rajesh Kumar, Accou .....

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the Act). 2. During hearing of this appeal, the crux of argument advanced by Shri Paresh Shoparia, ld. counsel for the assessee is identical to the ground raised by explaining that the flat in question was inherited by the assessee and there was a delay on the part of the society to transfer the shares/property to the assessee for which the assessee should not be penalized. Our attention was invited to various pages of the paper book. On the other hand, Shri, Vijay Kumar Soni, ld. DR, defended t .....

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), therefore, in order to transfer the said residential premises, as per last wish known to all family members, and also as per family arrangements necessary procedure was required to be undergone to transfer the said property. The assessee inherited the property w.e.f. 10/12/1999 (on death of the grandmother). In order to get the property transferred in the name of the assessee, various representations were made to the society, who after obtaining the legal opinion, asked the assessee to file a .....

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he Act by investing the amount of ₹ 37 lakh in NHAI bonds, which was denied by the Assessing Officer. On appeal, before the ld. Commissioner of Income Tax (Appeals), the stand taken in the assessment order was affirmed by observing that the grandmother of the assessee died intestate (without will), therefore, the law of succession of property, first, devolved on the sons and the daughters of Ms Kantaben K Shah and the property was acquired by way of family arrangements, therefore, the capi .....

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l heirs of the original owner of the property i.e. the grandmother. The assessee on 10/08/2006 wrote a letter to the society for transfer of shares/property and finally, the transfer of the flat under consideration was effected on 29/07/2008. The assessee invested in the bonds u/s 54EC of National Highway Authority of India on 31/10/2008. The order u/s 143(3) was passed on 19/12/2011 assessing the income at ₹ 49,26,480/- against the declared income of ₹ 13,30,880/-, filed by the asse .....

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ning of holding period of the property, whether from the date when it was held by the grandmother or the period when it was transferred in the name of the assessee. Before we proceed further, we are also expected to analyze what the short term capital gain is? As per section, 2(42B) of the Act, inserted w.e.f. 01/04/1998 by the Finance Act, 1987 (11 of 1987) defines the expression short term capital gain so as to mean- capital gain arising from the transfer of short term capital asset (as define .....

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p to 31/03/1995) Explanation, to section 2(42A) of the Act, in determining the period for which any capital asset is held by the assessee- (a) In the case of a share held in company in liquidation, there shall be excluded, the period subsequent to the date on which the company goes into liquidation, (b) In case of a capital asset which becomes the property of the assessee in the circumstances mentioned in section 49(1) (up to 31/03/1967) clauses (i) to (iii) of section 49), there shall be includ .....

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any other security (hereafter in section 2(42A) of the Act referred to as the financial asset, subscribed by the assessee on the basis of his right to subscribe to such financial asset or subscribed to by the person in whose favour, the assessee has renounced his right to subscribe to such financial asset, the period shall be reckoned from the date of allotment of such financial asset. (e) With effect from 01/04/1995, in case of a capital asset, being the right to subscribe any financial asset, .....

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family, (ii) Under a gift or will, (iii) (a) by succession, inheritance of devolution, or (b) on any distribution of asset on the dissolution of a firm, body of individual, or other association of person, where such dissolution has taken place at any time before 1st day of April, 1987 or (c) On any distribution of asset on the liquidation of the company or (d) Under transfer to a revocable or an irrevocable trust or (e) Under any such transfer as is referred to in clause (iv) or clause (v) or c .....

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the previous owner or the assessee, as the case may be. It has been further clarified by way of explanation, the expression previous owner of the property in relation to any capital asset owned by the assessee means the last previous owner of the capital asset, who acquired it by a mode of acquisition other than that referred to in clause (i) or clause (ii) or clause (iii) or clause (iv) of this sub-section. Thus, capital gain tax is to be computed by taking into consideration the provisions of .....

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