Appeal granted for capital gain calculation dispute under Income Tax Act

The appeal was filed against the denial of deduction under Section 54F of the Income Tax Act for the Assessment Year 2016-17. The appellant acquired a residential unit and subsequently sold it to her daughter. Due to unclear title, a rectification deed was executed, and the property was sold to a third party. The Tribunal accepted the appellant's argument that the rectification deed related back to the original allotment, entitling her to long term capital gain. The appeal was partly allowed, granting relief to the appellant by directing the calculation of capital gain for the land not conveyed to the daughter.

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Issues Involved:
1. Denial of deduction under Section 54F of the Income Tax Act for short term capital gain on sale of property.

Summary:
The appeal was filed against the order denying the deduction under Section 54F of the Income Tax Act for the Assessment Year 2016-17. The appellant had acquired a residential unit from Gujarat State Housing Board and subsequently sold the property to her daughter. The daughter failed to record her name in the City Survey Record due to unclear title of the land. A rectification deed was executed to clarify ownership, and the property was eventually sold to a third party. The authorities denied the claim of long term capital gain based on the holding period. The appellant argued that the rectification deed related back to the original allotment, entitling her to long term capital gain. The Tribunal accepted the appellant's contention, directing the Assessing Officer to calculate the capital gain for the land not conveyed to the daughter, granting relief to the appellant. The appeal was partly allowed.

The judgment highlighted the importance of the rectification deed in determining the holding period for capital gains tax purposes. It clarified that the appellant was entitled to claim long term capital gain for the land not conveyed to the daughter, based on the original allotment date. The Tribunal's decision provided relief to the appellant by allowing the appeal partly and directing the calculation of capital gain for the specific area of land.

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