29 December 2013
the query is as follows . Mr A sold long term land on 15/04/12.He also sold a L T residential house(HN1) on 15/05/12.He bought a house(HN2) on 1/06/12 but sold it again on 1/07/12. lastly he bought another house (HN3)on 1/11/12. He wants to claim LTCG on Land u/s 54F and LTCG onHN1 u/s 54against the purchase of HN3.Tax on STCG on sale n purchase of HN2 are paid .
Since as per flow of transaction you can not do so, however if you can produce sufficient proofs that HN2 was purchased from other resources other then proceeds of HN1 sale you can claim exemption u/s 54.
29 December 2013
mr vaibhav pl review this case The appellate Tribunal in Asstt. CIT v. Ms. Sultana Nazir [2012] 21 taxmann.com 385 (Chennai - Trib.) has held that when an assessee has availed of exemption under section 54F by acquiring a residential house and, subsequently, transfers the same within three years and acquires another residential house, the forfeiture of exemption for the sale can be nullified by the subsequent investment in the second residential house
the proviso to 54F was not violated because the second house was bought after expiry of one year. In your case, the proviso is being violated. Therefore, it wont apply to your case.
29 December 2013
Dear frds pl see this case The appellate Tribunal in Asstt. CIT v. Ms. Sultana Nazir [2012] 21 taxmann.com 385 (Chennai - Trib.) has held that when an assessee has availed of exemption under section 54F by acquiring a residential house and, subsequently, transfers the same within three years and acquires another residential house, the forfeiture of exemption for the sale can be nullified by the subsequent investment in the second residential house. waiting reply
29 December 2013
Yes friend. I agree. But Sultana Nazir was on 54F(3). Your case is getting hit by proviso to 54F(1). Had in Sultana Nazir both the purchases were made within 1 year, case would have gone against the assessee.
before applying a case to the facts of your case, you need to match the factual matrix and then create persuasive argument. What you are doing is that you are cherry picking the judgment part leaving aside the facts of the case.
29 December 2013
pl see a note from this case When the new asset (a residential house) is transferred, the capital gain arising thereon would be short-term capital gain when it is transferred within three years from the date of acquisition. As the exemption under section 54F was availed of for the said asset earlier, the quantum of exemption granted earlier would become deemed long-term capital gain because of section 54F(3). Again, when a residential house was acquired for the second time, the assessee was eligible to claim the benefit of exemption to the extent she had redeployed the sale proceeds.
29 December 2013
pl see a note from this case When the new asset (a residential house) is transferred, the capital gain arising thereon would be short-term capital gain when it is transferred within three years from the date of acquisition. As the exemption under section 54F was availed of for the said asset earlier, the quantum of exemption granted earlier would become deemed long-term capital gain because of section 54F(3). Again, when a residential house was acquired for the second time, the assessee was eligible to claim the benefit of exemption to the extent she had redeployed the sale proceeds.
Have you read the section. You are stuck on 54F(3). before 54F(3) to apply, you need to satisfy 54F(1). I hope that much law is understood by you. Where 54F(1) itself is not available, 54F(3) won't come into picture.
Rest I believe you are yourself a learned professional. But I hope you give your clients well considered advice rather than fixating on a particular case. Because if I am the DR, I am going to differentiate Sultana Nazir case from yours on factual matrix and thereby leaving your argument redundant.
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