Capital Gain Selected Case Law Summary CA Final

CIT v. Smt. Rama Rani Kalia

Where a leasehold property is purchased and subsequently converted into freehold property and then sold, the period of holding be reckoned from the date of purchase, and therefore, it is a LTCG.

P. P. Menon v. CIT

The period of holding of the asset received by the assesseepartner on dissolution of the firm has to be reckoned only from the date of dissolution of the firm.

CIT v. Manjula J. Shah

The indexed cost of acquisition in case of gifted asset has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset.

CIT v. Gita Duggal

Where a building, comprising of several floors, has been developed and reconstructed, would exemption under section 54/54F be available for the entire new residential house (i.e., all independent floors handed over to the assessee.

CIT v. Syed Ali Adil

An assessee is entitled to exemption under section 54 in respect of purchase of two flats, adjacent to each other and having a common meeting point.

CIT v. Gurnam Singh

Exemption under section 54B cannot be denied solely on the ground that the new agricultural land purchased is not wholly owned by the assessee.

CIT v. Kamal Wahal

Assessee is entitled to claim exemption under section 54F in respect of utilization of sale proceeds of capital asset for investment in residential house purchased exclusively in the name of his wife.

CIT v. Ravinder Kumar Arora

Where a house property is registered in joint names, the exemption under section 54F shall be allowed fully to the co-owner who has paid whole purchase consideration, and shall not be restricted to his share in the house property.

CIT v. Rajiv Shukla

The exemption under section 54F on transfer of depreciable asset held for more than 36 months cannot be denied on account of fiction created by section 50.

Gouli Mahadevappa v. ITO

Where the stamp duty value under section 50C has been adopted as the full value of consideration, reinvestment made in acquiring a residential property, which is in excess of the actual net sale consideration, shall be considered for the purpose of computation of exemption under section 54F, irrespective of the source of funds for such reinvestment.

Hindustan Unilever Ltd. v. DCIT

Exemption under section 54EC cannot be denied on account of the bonds being issued after six months of the date of transfer even though the payment for the bonds was made by the assessee within the six month period.

CIT v. Yatish Trading Co. Pvt. Ltd.

In the case of an assessee, being a dealer in shares and securities, whose portfolio comprises of shares held as stock-in-trade as well as shares held as investment, it permissible under law to convert a portion of his stock-in-trade into investment.

The gains arising on sale of those shares held as investments were to be assessed under the head “Capital gains” and not under the head “Profits and gains of business or profession”.

Updated: October 14, 2017 — 5:43 am

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