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Assessee denied section 54F exemption for owning two residential properties on asset transfer date despite gifting one property to sister ITAT Cuttack denied exemption under section 54F to assessee who owned two residential properties at the beginning of the transfer date. Though assessee ...
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Assessee denied section 54F exemption for owning two residential properties on asset transfer date despite gifting one property to sister
ITAT Cuttack denied exemption under section 54F to assessee who owned two residential properties at the beginning of the transfer date. Though assessee gifted one property to sister on the same date as asset transfer, the Tribunal held that "on the date of transfer" means any time during that date, not just the end. Since assessee owned multiple residential houses at the start of the transfer date, the exemption was properly denied by AO and CIT(A). Appeal dismissed.
Issues Involved: The appeal concerns the allowance of claim of exemption u/s. 54F of the Act based on the ownership of residential properties by the assessee on the date of transfer of the original asset giving rise to capital gains tax.
Details of Judgment: 1. The assessee argued that as of the date of transfer, they did not own more than one residential house, thus qualifying for exemption u/s. 54F. The assessee had gifted a property to their sister and utilized the sale proceeds for constructing a new residential building.
2. The Assessing Officer contended that the assessee owned more than one residential house at the time of transfer, citing the sequence of sale and gift deeds. The Hyderabad Bench decision highlighted a case where a gift was considered a tax avoidance tactic, emphasizing the intention behind the transfer.
3. The Tribunal ruled that on the specified date of transfer, the assessee did own more than one residential house, as they had gifted a property but continued to reside in it. The interpretation of "on the date of transfer" was crucial, and the Tribunal upheld the decision to deny the exemption u/s. 54F.
4. The Tribunal distinguished previous cases where gifts were made before the transfer date, emphasizing the specific circumstances of each case. The Tribunal found the interpretation proposed by the assessee's representative to be untenable, leading to the dismissal of the appeal.
Separate Judgment Delivered: No separate judgment was delivered by the judges.
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