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1 - 10 of 13 (0.22 seconds)Section 54F in The Income Tax Act, 1961 [Entire Act]
Commissioner Of Income-Tax vs T.N. Aravinda Reddy on 1 February, 1978
'Purchase' can also refer to payment of consideration or part
consideration alongwith transfer of possession under Section
53A of the Transfer of Property Act, 1882. Supreme Court
way back in 1979 in CIT v. T.N Aravinda Reddy [1979] 120 ITR
46/2 Taxman 541, however, gave it a wider meaning and it
was held that the payment made for execution of release
deed by the brother thereby joint ownership became
separate ownership for price paid would be covered by the
word 'purchase'. It was observed that the word 'purchase'
used in Section 54 of the Act should be interpreted
pragmatically. In a practical manner and legalism shall not
be allowed to play and create confusion or linguistic
distortion. The argument that 'purchase' primarily meant
acquisition for money paid and not adjustment, was rejected
observing that it need not be restricted to conveyance of
land for a price consisting wholly or partly of money's worth.
The word 'purchase', it was observed was of a plural
semantic shades and would include buying for a price or
equivalent of price by payment of kind or adjustment of old
debt or other monetary considerations. It was observed
that if you sell a house and make profit, pay Caesar (State)
but if you buy a house or build another and thereby satisfy
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ITA No. 1644/Hyd/2019
the conditions of Section 54, you were exempt. The purpose
was plain; the symmetry was simple; the language was plain.
Sh. Sanjeev Lal Etc. Etc vs Commissioner Of Income Tax ... on 1 July, 2014
9. Recently Supreme Court in Civil Appeal Nos. 5899-
5900/2014 titled Sanjeev Lal v. CIT [2014] 46 taxmann.com
300 again examined Section 54 in a case where the assessee
had entered into an agreement to sell a house to a third party
on 27th December, 2002 and had received RS.15 lacs by way
of earnest money and subsequently received the balance sale
consideration of Rs.l.17 crores (total being Rs.1.32 crores)
when the sale deed was executed on 24th September, 2004.
In the meanwhile, the assessee had purchased another house
on 30th April, 2003. Benefit under Section 54 was denied] by
the High Court observing that the new house had been
purchased prior to execution of the sale and not within one
year prior to sale of original asset i.e. new house has been
purchased on 30th April, 2003 whereas the earlier asset was
sold only on 24th September, 2004. The Supreme Court
allowing the appeal noticed that the agreement to sell was
executed on 27th December, 2002 but the sale deed could
not be executed because of inter-se litigation between the
legal heirs, as one of them had challenged the will under
which the assessee had inherited the property. The
agreement to sell, it was held had given some rights to the
vendor and reduced or extinguished rights of the assessee.
This, it was observed was sufficient the purpose of Section
2(47), which defines the term transfer in relation to a capital
asset. In the light of the factual matrix, it was observed that
the intention behind Section 54 was to give relief to a person
who had transferred his residential house and had purchased
another residential house within two years of transfer or had
purchased a residential house one year before transfer. It
was only the excess amount not used for making purchase or
construction of the property within the stipulated period,
which was taxable as long term capital gain while on the
amount spent, relief should be granted. Principle of
purposive interpretation should be applied to subserve the
object and more particularly when one was concerned with
exemption from payment of tax. The assessee, therefore,
succeeded. The observations made in the said decision are
also relevant on the question whether the payments made by
the assessee to the person with whom he had
entered.into.an earlier agreement to sell should be allowed
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ITA No. 1644/Hyd/2019
to be set off as expenses incurred in relation to the sale deed
which was executed."
Smt. Uma Shashi Sharma vs Deputy Commissioner Of Income Tax on 3 November, 2016
The Hon'ble Delhi High Court further referred to the decision of
Hon'ble Madhya Pradesh High Court in the case of Smt. Shashi
Varma vs. CIT, 224 ITR 106 (M.P) and that of the Hon'ble Calcutta
High Court in the case of CIT vs. Smt. Bharati C. Kothari (Cal) 244 ITR
352 and opined that when substantial investment was made in the
new property, it should be deemed that sufficient steps had been
taken and it would satisfy the requirements of section 54 of the Act.
As per the Hon'ble High Court, the basic purpose behind section 54
of the Act is to ensure that the assessee is not taxed on the capital
gain, if he replaces his house and spend money earned on the capital
gain within the stipulated period.
Commissioner Of Income-Tax vs Smt. Bharati C. Kothari on 6 March, 2000
The Hon'ble Delhi High Court further referred to the decision of
Hon'ble Madhya Pradesh High Court in the case of Smt. Shashi
Varma vs. CIT, 224 ITR 106 (M.P) and that of the Hon'ble Calcutta
High Court in the case of CIT vs. Smt. Bharati C. Kothari (Cal) 244 ITR
352 and opined that when substantial investment was made in the
new property, it should be deemed that sufficient steps had been
taken and it would satisfy the requirements of section 54 of the Act.
As per the Hon'ble High Court, the basic purpose behind section 54
of the Act is to ensure that the assessee is not taxed on the capital
gain, if he replaces his house and spend money earned on the capital
gain within the stipulated period.
Section 53A in The Transfer Of Property Act, 1882 [Entire Act]
Section 45 in The Income Tax Act, 1961 [Entire Act]
Sh. Joginder Singh, Ambala City vs Ito, Ambala on 30 July, 2019
For
the sake of ready reference we deem it just and necessary to extract the
relevant portions of the order in the case of Sh. Hasmukh (supra),
hereunder:-