TMI Blog2016 (1) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... under a gift, or will or an irrevocable trust does not attract long term capital gain as the provision of Sec 47(iii) of the Act. Hence, the gift does not attract long term capital gain tax. Coming to the exemption provisions of Sec 54 the assessee has complied with the provisions and the conditions laid down and the long term capital gains set-off with the cost of acquisition of new asset purchased in the same year but the issue arise whether the settlement or gift of such property claimed as exemption will call for addition on transfer within three years. After considering the elaborate submissions, judicial decisions followed, the assessee after availing exemption settled the property in favour of the daughter duly following the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated the fact that the action of the assessee to acquire the property in his name and immediately settling it in favour of his daughter is not much distinct from giving the sale proceeds to his daughter and .she making the investment in her name, in which case the benefit of reinvestment is lost without any dispute. 2.4. The Id CIT(A) ought to have appreciated that the assessee seems to manipulate the provisions of the section by misinterpreting the same. 2.5. The Id CIT(A) ought to have applied the ratio of the decision of the H'ble Bombay High court in the case of Prakash v ITO (2008) (173 Taxman 311) wherein it was held that in order to qualify for exemption under section 54F, it is necessary and obligatory to have inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered settlement deed No.1225 dated 1st November, 2010. It was submitted in compliance to show cause notice that the Capital gains shall arise only when the settle i.e. daughter of the assessee sells the property within a period of three years. Contra to the submissions, the Assessing Officer gave findings that the settlement does not cover u/s.54(i) or 54(ii) of the Act. Further, the ld. Authorised Representative substantiated his claim that under the provisions of Section 47(iii) gift is not taxable and the word transfer does not include family settlement. Considering the submissions and explanations the Assessing Officer deferred with the explanations and made an addition of long term capital gains alongwith other additions and ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty which was acquired new was settled in favour of his daughter by means of settlement deed, out of love and affection. This should not be treated as Transfer. The assessing officer contended that, the Section 47(iii) exempts only the Gift and not Settlements made. The settlement is made out of love and affection and it was a gift though. termed as settlement. This was made without any consideration for exclusive enjoyment of his daughter. There is no definition of the term Gift under the Income Tax Act Section 122 of Transfer of Property Act, Gift is defined as Gift is the transfer of certain existing moveable or immovable property made voluntarily without consideration of one person called donor to another the donee and accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) order and uphold the order of the Assessing Officer. 6. On the other hand, the ld. Authorised Representative has filed paper book and furnished detail submission on the issues dealt by the Assessing Officer alongwith settlement deed and also the interpretation of provisions applicable to gift under Income Tax Act. The ld. Authorised Representative drawn our attention to Secs 47(i) and 47(iii) and also simultaneously Sec 54 of the Act. The contention of the ld. Authorised Representative is that though the settlement deed is made without any monetary consideration and purely out of love and affection qualifies for exemption as gift. There is no dispute about the compliance of Sec. 54 except the Assessing Officer treated the settlement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty, which being 39.2115% undivided share in all that piece and parcel of land and building having twin door numbers namely (i) New door No.8, Old door No.10,Arunachala Achari Street and (ii) door No.8, Main Sahib II Street, Triplicane, Chennai 600 005, comprised in R.S.No.3017 of Triplicane Village, Out of 1 ground and 729 square feet, which is morefully described in the Schedule hereunder, to the settlee herein absolutely for ever and free from all encumbrances whatsoever, with all the rights of alienation and the Settle has accepted the same. As far as the settlement is concerned the assessee as a donor transferred the immovable property out of love and affection without consideration to the daughter done and same is not regarded as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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