Direct tax
This query is : Resolved
10 February 2014
meaning of relinquishment in capital gain head
10 February 2014
A relinquishment takes place when the owner withdraws himself from the property and abandons his rights thereto; it presumes that the property continues to exist after the relinquishment - CIT v. Rasiklal Maneklal (HUF) [1989] 177 ITR 198/43 Taxman 259 (SC).
Eg: Where the assessee initially paid advance under an agreement for the purchase of a property, reserving right to specific performance of the agreement, and later received consideration under another agreement under which the earlier agreement was cancelled and the vendor was allowed to sell the property to any person at any price, there was a relinquishment of right by the assessee which amounted to ‘transfer’, (K.R. Srinath v. Asstt. CIT [2004] 141 Taxman 268 (Mad.).
Eg: Where the assessee initially paid advance under an agreement for the purchase of a property, reserving right to specific performance of the agreement, and later received consideration under another agreement under which the earlier agreement was cancelled and the vendor was allowed to sell the property to any person at any price, there was a relinquishment of right by the assessee which amounted to ‘transfer’, (K.R. Srinath v. Asstt. CIT [2004] 141 Taxman 268 (Mad.).
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