Capital gains on redevelopment

Save Share

This query is : Open

Kinnari (Querist)
Follow

02 February 2013 a father transferred a residential property in the name of his 2 sons by mentioning it in the will in the year 2008. That house was a part of chawl system.

Now that chawl has been redeveloped to a building. So these 2 sons were allotted 3 flats each - 2 adjacent and 1 on separate floor. Also they were given cash consideration of Rs 15,00,000/- each.

So can these 3 flats be claimed for deduction u/s 54?

pls answer in detail and kindly give reference to any case law to support the answer....thanks in advance!

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

02 February 2013 It is a controversial issue so as to decide whether you get deduction in respect of all the 3 flats-

You may refer-

1. CIT V. K.G. Rukminimma(2011) 48 DTR 377 (Kar)
2. K.C. Kaushik v. P.B. Rane ITO(1990) 185 ITR 499(Bom)
3. ACIT V. Leela P Nanda (2006) 286 ITR(AT) 113(Mum)
4. CIT V D Ananda Basappa (2009) 309 ITR 329 (Karn)
5. Pawan Arya V CIT(2011) 49 DTR 123 (P&H)
.
If you can form an opinion, by reading the above case laws, as well as the case laws referred in these , please discuss.
.

Kinnari

Kinnari (Querist)
Follow

04 February 2013 Thanks sir for the case laws...I could relate my case to 1, 3 and 5th case laws to some extent. I also referred this case law - "K.G. Vyas vs Seventh Income-Tax Officer on 6 January, 1986."
In some places, I came across a case law named "ITO vs. Abbas Ali Shiraz (supra)" but i cudnt find exact case law.
you may also refer to a case law in this link -
https://ramadvice.wordpress.com/2012/07/27/capital-gains-purchase-of-two-adjacent-flats-to-avoid-capital-gain-tax-case-law/

so in my opinion, deduction u/s 54 can b claimed for all 3 flats....if it is wrong treatment or if in ur view different treatment is to be given, pls let me know...
Thanks! :)

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!