TaxTMI 
TaxTMI 
2023 (12) TMI 708
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....CIT(A) has erred in allowing the exemption u/s 54 and 54EC of the Act ignoring fact that the property in question is not a long term capital asset within the meaning of IT Act, 1961 and was not covered under the provision of clause (b) of Explanation 1 to section 2(42A) r.w.s. 49(1). 2. Whether on the facts and in the circumstances of the case in law, the Ld. CIT(A) has erred in allowing the indexed cost of acquisition of the entire property whereas during the year the assessee had sold only a part of the said property." 3. Brief facts of the case are that the assessee is an individual and engaged in the business and profession under the name and style of Impression Inc. The assessee was selected for scrutiny under CASS. A notic....
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....sessee has stated that the property which she acquired through gift deed was inherited property and she has received from his father in law i.e. Shri Kanwaljit Singh. However, the fact is that the property was not inherited property. It was purchased by Shri Kanwar Kultar Singh in the year 1970, hence Shri Kultar Singh was the absolute owner of the said property for which he was given POA to his brother Shri Kanwaljit Singh. iii As per the gift deed made by Shri Kanwaljit Singh the property was transferred by Shri Kanwar Kultar Singh and not by Shri Kanwaljit Singh as it is mentioned that the property has been transferred on behalf of recorded owner ie. Shri Kanwar Kultar Singh. The relevant para of gift deed at page no. 3 is produ....
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.... covered under the legal heirs as per Hindu Succession Act. vii The assessee has stated that since the property is a inherited property which she received through a gift deed, hence she is eligible for getting indexation benefit thereon. As stated above the property was belong to the brother of her father in law and not her own father in law, hence it is not a inherited property, therefore the holding of previous owner for calculation inflation index is not allowable to the assessee. viii. The facts of case laws cited by assessee are not matching with the facts of the assessee. 3.1. Based on above discussion the AO held that the following conclusion has been drawn: i. The assessee has not paid any amount for ac....
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....ant can be treated as 'short-term' or 'long-term' capital asset. The claim of exemption u/s 54EC/54 of the Act, is consequential. 5.2 Legal position:- The legal position in the present case is required to be analyzed with respect to the provisions laid down in sub-section (1) of section 49 read with clause (42A) of section 2 of the Act. (a) Section 49 prescribes 'cost with respect to certain modes of acquisition. Clause (ii) of Sub-section (1) specifies that where the capital asset has become the property of the assessee under a gift or will, the cost of acquisition of the assets shall be deemed to be the cost for which the previous owner of the property acquired it, as increased by the cost of improvem....
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....the donor, to another, called the donee and accepted by or on behalf of the done." By implication, it follows that a gift deed is a document that evidences such a transfer and takes effect during the lifetime of the donor. 5.5 The conclusion arrived at by the A.O at clause (v) of para 9 of the assessment order, that the gift was given by Sh. Kultar Singh without any consideration through his attorney i.e. Sh. Kawaljit Singh, is not inconsonance with facts of the case and is erroneous. Further, invocation of explanation (e) to Section 56(2)(vii) to the facts of case is also not the correct interpretation of law and has no bearing on the facts of the case. The Assessing Officer has not brought on record any document or evidence that ....