Capital Gain

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Querist : Anonymous

Querist : Anonymous (Querist)

15 June 2011 House property purchased by father in 2006 for Rs.1.6 Crore by availing a housing loan of Rs.1.25 Crore. Now father made a settlement deed of this property in favour of his son in June 2011 mentioning in settlement deed that outstanding housing loan of Rs.1.00 crore to be repayable by his son. In the mean time son is having a Housing plot which was purchased by him 15years back for Rs.5.00 Lac. Now he (Son) is selling this housing plot in July 2011 for Rs.1.00 Crore and repaying the housing loan of Rs.1.00 Crore out of the sale consideration of housing plot.Long term capital gain arised out of sale consideration of housing plot is Rs.85 Lacs after indexation.

My question is whether this long term capital gain can be claimed as investment in new asset u/s 54F of IT act for repaying of this housing loan since in son's books of account cost of house property will be Rs.1.00 Crore by crediting housing loan for the same.. Experts plz reply soon.. give with reasons your answers.. reply soon...

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 June 2011 Where is the new asset purchased by the son? The property received from father? As there any agreement of sale entered between the two?
54F exemption is available, when a property is purchased just one year before the sale of original asset. In this case the property
has been received by son to father and in the absence of any information it can be presumed as a property received U/s 49(1).
The property in question has been originally purchased in the first case by father in 2006 and in the second case it has changed hands U/s 49(1) which is not considered as transfer.
It is therefore, better to purchase a new asset. It can not be deemed as new asset in the hands of the assesee.

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Querist : Anonymous

Querist : Anonymous (Querist)

18 June 2011 sir i have modified the question sir.. pls reply to this question sir

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