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TMI Blog1973 (3) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... re sold for Rs. 14,000 each and the land for Rs. 6,000, thus realising a total consideration of Rs. 34,000. In addition, the assessee obtained a sum of Rs. 500 by way of forfeiture of deposit in respect of one of the transactions. Thus in all the assessee got a sum of Rs. 34,500 by the sale of these properties. Adopting the value of these properties as on January 1, 1954, at Rs. 20,000 the assessee returned an income of Rs. 14,500 under capital gains and claimed exemption under section 53 of the Income-tax Act, 1961 (hereinafter called "the Act"), in respect of this income on the ground that each of the three capital assets was sold for less than Rs. 25,000 and the aggregate value of all the properties owned by him did not exceed Rs. 50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the Act and in particular the provisions of sections 45, 48 and 53. The scheme of the Act, in our opinion, envisages each transaction separate and independent. Sections 45 and 48 take note of this position and provide for finding out the capital gain in respect of each transaction. Capital gain for the year is determined by finding out the gain in respect of each of the transactions during the year and adding up the same vertically, but section 53 provides that, notwithstanding anything contained in section 45, capital gains arising from certain transfers are exempt from tax. That section reads as follows: "53. Capital gains exempt from tax.-Notwithstanding anything contained in section 45, where a capital gain arises from the transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section and the proviso use the expression "transfer" in singular though the transfer may comprise of more than one capital asset. The proviso requires that the third condition referred to above shall be satisfied with reference to a particular transaction and with reference to the date of that particular transfer. It does not say that at the beginning of the accounting year the assessee shall not have been the owner of buildings and lands appurtenant thereto whose aggregate fair market value exceeds the sum of Rs. 50,000. Thus, the relevant date for the purpose of finding out whether the third condition prescribed by the proviso is satisfied or not is the date of the particular transaction and not any other date. It follows that each trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the aggregate value of Rs. 15,000 and Rs. 5,000 is to be taken for the purpose of finding out the applicability of the main part of the section, still since it is less than Rs. 25,000 the assessee would be entitled to exemption for the entire Rs. 20,000 though on a strict interpretation of the proviso the first sale for Rs. 15,000 was not entitled to any exemption. Similarly, take another illustration. An assessee was owning buildings of the aggregate value of Rs. 45,000. He sells one item for Rs. 10,000, thereafter purchases another item for Rs. 20,000 and sells yet another item for Rs. 10,000. For the first sale the proviso is satisfied, but for the second sale the proviso is not satisfied, because of the subsequent purchase of prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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