Income tax exemption u/s 54

[SHOEB VAPIWALA]

Dear Expert(s),

The 5 persons A, B, C D and E are had sold their inherited property prior to independence of India in F Y: 2006-07 for ₹ 11.50 Lacs. The ITO has issued a notice dtd.: 13/02/2015 u/s 129 - incumbent stating to treat it as u/s 142(1). On presenting the fact that the notice is tame barred, the ITO has shown the The Order of the ACIT dtd. 26/2/2014-stating that to issue the notice u/s 147 and to begin proceeding u/s 50 (C) of the I T act., 1961. Does the issued notice is valid under the law?

Now, the ITO is proceedings u/s 148. Does it also valid?

The inherited all 5 persons are having the court order in the year 1991-92 towards 1. ‘Legal Heir Certificate’ 2. Valuation of ₹ 1,98,840/- in the year 1991-92 to pay stamp duty accordingly.

Does the court order stating the Value ₹ 1,98,840/- can be valid for cost of acquisition with inflation index of 1991-92? Or Valuation as on 01.04.1981 is required?

Further, What will be the consequences of LTCG u/s 54 out of the sales realization:

• Mr. A has purchased a new property on his own in F Y : 2006-07
• Mr. B has purchased a new property on the name his wife in the F Y: 2006-07
• Mr. C has made Repairs and renovation his self-occupied property in his name. if it is in the name of his wife what would be consequences of LTCG.
• Mr. D has purchased a new property on his two living brothers in F Y: 2007-08. But he is expired in F Y:2013-14. Is the two living sons of Mr. D are liable under the proceedings to pay LTCG in spite of the fact that his father was liable but by the act of god he is no more in the word?
• Mr. E has not purchased any property but he had spent for his sever disease i.e. cancer in F Y: 2006-07 and expired in 2007-08. It he living inherited wife and sons of Mr. E are liable to pay LTCG due under the proceeding.

AI Summary

Validity of Income Tax Notices Under Sections 129, 147, and 50(C) Questioned for 2006-07 Property Sale Five individuals sold inherited property in the fiscal year 2006-07 for 11.50 lakhs. The Income Tax Officer (ITO) issued a notice on 13/02/2015 under section 129, later supported by an Assistant Commissioner of Income Tax (ACIT) order to initiate proceedings under sections 147 and 50(C) of the Income Tax Act, 1961. The validity of these notices is questioned. The court order from 1991-92 valued the property at 1,98,840 for stamp duty purposes. Queries include whether this valuation is valid for cost acquisition with inflation index and the implications for Long-Term Capital Gains (LTCG) under section 54 for each individual's property transactions or personal circumstances.