Hi guys i need some help Say there is Mr.A who has acquired a land in 1993 for 2.5lacs then he gifts the same to his wife in 2007(clubbing is triggered here).The wife Mrs.A gives the power to sell the land to a partnership firm( in 2008) in which she is one of the partner.They sell the land as undivided shares to 4 ppl.Now Mrs.A after getting the sale consideration buys a house in her name.Now my doubt is capital gains shud actually be in the hands of Mr.A due to clubbing provisions but he cant get the benefit of Section 54 bcos the new residential house which they bought is in the name of Mrs.A. Pls advise regarding this wit relevant case laws if any.
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query regarding cap gains and clubbing
Replies (3)
According to me also deduction under section 54 will not be allowed.
Dear sravan
I think Mrs.A is make investment in the partnership firm as she is a partner .
As per above the clubbing provission the income is taxable on mr. A only up to the share of profit of Mrs. A
in the proportion amt given by A to Mrs. A
If am wrong ple let me know.
TILL 2007:
Mr.A will be treated as Deemed Owner u/s 27 and Hence, IHP will be taxed in the Hands of Mr.A
Sale of Land by Mrs.A:
In case of Capital Gains, first Income has to be FIRST Calculated in the hands of Mrs.A and then it is to be clubbed.
So when you calculate in the hands of Mrs.A, you will give her the Deduction u/s 54 and then arrive at the final figure.
This NET income after the deduction is clubbed.
Power to Firm
Power to firm is irrelevant here as there is transfer of property to the firm.
Shiva
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