Case laws in respect of sec 54

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2014 one person has sold two land and invested amount in one residential property
can any one tell me respective case laws
regarding section 54 exemption

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

26 November 2014 Sale of land will fall under section 54F
Section 54 is for residential property.
54F aims at giving exemption for the capital gain on sale of capital asset and the gain is invested in residential property.

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2014 thank u sir, by mistake i written sec 54 instead of 54 F
can u provide me some case law

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
Follow

26 November 2014 yes and also u can additionally invest upto 50 lkahs in a FY under sec 54EC bonds in nhai or rec.

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

26 November 2014 Why case law is needed. The provision is unambiguous. You can sell as many capital assets as you wish. The exemption would be available for residential property, subject to other conditions embedded in section 54F e.g. no other residential property be held by the person as on the date of transfer etc

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2014 sir actually one person has sold out two land and purchased one residential property but by mistake he claimed exemption us 54 instead of sec 54 F
his file has come in scrutiny due to many issue and ITO required case laws regarding this exemption
any solution is there.....

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

26 November 2014 yes, ew can give him case laws as well. No issues. I will find out. In the mean time just try to get it from any book on Direct Taxes by Vinod K Singhania, if you have the one.

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2014 but sir he claimed exemption in wrong section

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

26 November 2014 Claiming exemption under wrong section shall NOT deprive the assessee of getting the exemption under the proper section. Give the letter to The Assessing Officer to that effect and he will consider the same.

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2014 but if assessee has not invested whole net consideration in new residential property ,then according to sec 54 F proportionate amt will be exempted and here assessee has claimed full exemption
now there will be taxable capital gain if we claim in sec 54 F

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

26 November 2014 yes, That is correct. The assessee will get the proportionate exemption. No any case law is available for FULL exemption for the part proceeds

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2014 if assessee is getting rent from rented out these properties for commercial purpose
it means at the time of trasfer of land he was owner of more than one house property,then he cant claim exemption u/s 54 F
for example he has rented out 2 property to company for running business .

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

26 November 2014 No any case law available for such a TRICKY situation. Some courts are liberal in granting excess time as per 54F, some are ready to grant more than 1 flat for 54F.... but as on the date of trabsfer there should not be any other residential property.
Provided that nothing contained in this sub-section shall apply where—

(a) the assessee,—

(i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or

(ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or

(iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and

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