EXEMPTION U/S 54G

[MV GANGADHARAN]

THE ASSESSEE AS INDIVIDUAL EARNED CAPITAL GAINS BY SALE OF HIS OLD INDUSTRIAL SHED AND REINVESTED THE PROCEEDS IN NON URBAN AREA IN NEW PLANT AND MACHINERY IN A PARTNERSHIP FIRM IN WHICH HE IS A PARTNER.INFACT HE HAS RELOCATED HIS STRUCTURAL ENGINEERING BUSINESS TO THE PARTNERSHIP FIRM. HE CLAIMED EXEMPTION OF CAPITAL GAINS U/S 54G. THE A O HOWEVER DIS ALLOWED THE STATING THAT THE REINVESTMENT SHOULD HAVE BEEN UNDER THE SAME P A N . HOWEVER READING SEC 54 G WHICH USES THE WORD UTILIZED, I FEEL A RESTRICTED INTERPRETATION IS .NOT JUSTIFIED PL GIVE YOUR VALUED OPINION

AI Summary

Capital gains exemption: whether reinvestment via a partnership qualifies despite change of PAN affecting utilization requirement. Whether capital gains from sale of an industrial shed are exempt where the assessee reinvests proceeds via a partnership in which he is a partner is contested. The AO disallowed exemption asserting reinvestment must be under the same PAN, while the taxpayer points to the statutory use of the term utilized and contends that reinvestment through the partnership, coupled with business relocation, should qualify.