Exemption u/s 54

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 February 2013 Dear All,

Is it mandatory to file a return of income in order to claim exemption u/s 54 of the Act? (The assessee does not have any other income).

Are there any case laws on this matter?

Thanks & Regards

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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01 February 2013 U/s 139, there is a requirement to furnish the return by the assessee having Gross Total Income exceeding the taxable limit.
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Also- if Total Income before giving effect to exemption U/s Section 10A, 10B, 10BA, exceeds taxable limit - Return filing is compulsory.
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If we see Exemption U/s 54- It is claimed to arrive the taxable Income under the head Capital Gains at computational stage. So no where , it has been written that return filing is compulsory to claim the deduction.
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I can not provide any case law, as all the case laws have been framed on the basis of returns filed or belated returns. However, once the requirement of exemption has been complied with, the assessee can argue, by producing the necessary details.
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In case the AO reopens the assessment and asks to furnish the details of Total Income- it can be argued that the Income under the head Capital Gains can be computed correctly only after deducting the expenses in relation to the Transfer and allowing the claims for the exemption.
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So, in my view, as per Section 139 or 54, return filing is not mandatory.
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