TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 646
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....exemption u/s. 54F of the Act. It was the submission that the assessee owned three properties one being Flat No.1, Maha Maya Enclave, Plot No.53, VIP Area, IRC Village, Bhubaneswar, second being subplot No.36A, Plot No.61/1761/1836, Bharatpur, Bhubaneswar and third being Sub-plot No.36B, Plot No.61/1761/1836, Bharatpur, Bhubaneswar. The assessee also owns another plot of land namely Plot No.GA-722, PO: Ghatikia, Bhubaneswar. It was the submission that the assessee had sold sub-plot No.36A to one Mr Maqsood Ahmed Khan, which had given rise to capital gains tax. The sale had been done on 27.12.2014. The sub-plot No.36B which consisted of a house property was on rent to the assessee's sister namely, Stm. Amitarani Giri. She had been staying on....
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....rded as the owner or even a part owner of the property (the Sion residential flat) gifted by her to her husband on 03.10.2008. Even if the same is for the purpose of enabling availing benefit under section 54F, we cannot by any score treat as not valid in the eyes of law. The law does not oblige a person to pay maximum taxes or authorize disregarding a lawful transaction if the same has the effect of reducing his tax liability. The transfer is by no means sham or bogus, notwithstanding that the assessee would continue to reside with her family, including her husband, in the said house, i.e., both before and after its gift to her husband. That is, true, the assessee, along with her family, including her husband, continues to reside in the Go....
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....erty no. G-602 was gifted to his wife, then it cannot be presumed that the assessee continued to be owner of the said property even after execution of registered gift deed in favour of his spouse. So far as the taxable income from the said property is concerned, the assessee's stand gets support from the order of the ITAT Mumbai Bench in the case of Smt. Maya wherein it was held that section 64(1)(iv) will not operate to nullify gift and would operate only to club income in the hands of donor assessee. 14. At this juncture, it is also relevant to note that the assessee is the owner of only one property i.e. JPH-03, Central Park, Sector 4, having 50% of share as per conveyance deed available at assessee's paper book pages 96 to 119 after s....
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....CIT(A) and uphold the same. Accordingly, ground no. 2 of the revenue is also dismissed." It was the submission that as the assessee did not own more than one residential house on the date of transfer of the property/asset, which gave rise to the long term capital gains, the assessee was entitled to claim of exemption u/s. 54F. 4. In reply, ld Sr DR submitted that a perusal of the order of the Assessing Officer at page 4 clearly showed that the document number of the sale deed is prior to document number of gift deed, which clearly showed that when the vacant plot was transferred, the assessee owned more than one residential house and consequently, the proviso to section 54F came into play and the assessee was not entitled to exemption u/s....
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....n u/s. 54F of the Act and to avoid due payment of taxes to the Government. Undoubtedly, tax evasion connotes illegally suppressing facts, falsifying records, fraud or collusion to evade tax liability with the help of such unfair means. Whereas abusive tax avoidance involves 'contrived' or 'artificial' schemes. In the present case, the assessee was engaged in the artificial transfer of one house by way of gift deed just prior to the effective date. Further, under sections 23 and 24 of the Indian Contract Act, 1872, when the object is to defeat any provisions of law, and when consideration is of such nature that, if permitted, it would defeat the provisions of any law, the contract will be void. In the present case, per se gift deed was not e....
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....ents because the date of transfer starts at 00 hours and ends at 23.59 hours. On the date means any time during the date and at the beginning of the date of intended transfer of the original asset, the assessee did own more than one residential house. This being so, I am of the view that the Assessing Officer and ld CIT(A) is right in denying the assessee the benefit of exemption u/s. 54F of the Act. 6. The decision of Mumbai Bench in the case of Smt Maya A Ajwani (supra) relied upon by ld AR would not apply insofar as the facts in the said case was different as the assessee in that case had gifted her share in the property to her husband before the date of transfer of the capital asset which gave rise to capital gains. Similar is the case....