Clarification on capital gains

Dear All, Good Evening. Pls some one clarify the below case: one person holding house property in his name since a long time sold it in the year 2015 and distributed the amount to his 2 sons and deposited some amount in the name of his wife in bank account. now one of the son purchased a house with that amount and registered in his name. My query is that whether the father can claim exemption under section 54 by saying that the house property purchased by the son is with fathers money. because Andhra Pradesh High Court in the case of Late Mir Gulam Ali Khan Vs. CIT, (1987) 165 ITR 228 (AP) has held that the object of granting exemption under Section 54 of the Act is that an assessee who sells a residential house for purchasing another house must be given exemption so far as capital gains are concerned. The word “assessee” must be given wide and liberal interpretation so as to include his legal heirs also. There is no warrant for giving too strict an interpretation to the word “assessee” as that would frustrate the object of granting exemption. Kindly clarify the tax issues in the hands of father, 2 sons and mother.
Replies (4)

I Am Not Aware About This Case Laws But You Will Not Get Exemption If Assessee Son Is Purchasing Property In His Own Name. You Can Purchase Property On Your Wife Case A Security Purpose May Be Allowed As Exempt. But In The Hands of Son Assessee Not Able to Claim Exemption.

 

Ragarding Your Case Laws I Have To Think It May Be Come Into Play When Assessee Is Died After Transfer Of Property And His Legal Heir Received Consideration And Purchase The Property But I Have To Confirm That.

But In You Question It's Clear That Assessee Son Is Purchasing House Property So Absolutely It Will Not Able To Claim Exemption Us 54

what could be the available options for tax planning.

Is there any option available from HUF point of view.

First Don't Give Money To Son, Purchase the  Property Out Of That Money And After 3 Years transfer This Property As Gift To Son

3 Years Time I Just Say For Avoid Future Litigation. Even Though Gift of Imovable Property Not Fall With The Defination of Trasnfer I wIll Prefer That You Will Transfer After 3 Years Becuse Whatever House You Have Purchase You Are Not Able To Transfer Within 3 Years

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