Legal Reference Library

In Dolarrai Hemani vs. ITO, the Tax Tribunal held that the fact that the stock is thinly traded and there is unusually high gain is not sufficient to treat the long-term capital gains as bogus when all the paper work is in order. The revenue has to bring material on record to support its finding that there has been collusion / connivance between the broker and the assessee for the introduction of its unaccounted money.

In CIT vs. Greenfield Hotels & Estates Pvt. Ltd, the issue before the Tribunal was whether Section 50C of the Act would be applicable to transfer of leasehold rights in land and buildings. The Tribunal followed its decision in Atul G. Puranik vs. ITO (ITA No.3051/Mum/2010) decided on 13 May 2011 which held that Section 50C is not applicable while computing capital gains on transfer of leasehold rights in land and buildings. On appeal by the department to the Hon'ble Bombay High Court held dismissing the appeal:

Smt. Ujjawala Sitaram Baheti Versus Asstt. Commissioner of Income Tax, Circle – 1, Jalgaon and Vica-Versa Computation of Long term capital gains (LTCG) - Disallowance of payment made to hutment dwellers for vacating the land - Held that:- These unauthorized occupants do not have permanent place of stay and they move from one place to another till the time they get place to settle down. Moreover, the dwellers were not personally known to the assessee. In such circumstances it is not prudent to expect from the assessee to produce the illegal occupants of land to whom payments were made. In so far as second objection is concerned the assessee has furnished a copy of title of civil suit filed in the Civil Court, Jalgaon. A perusal of same shows that the suit was filed against 19 defendants, if the assessee has included the name of some more persons in the list of unauthorized occupants to whom the payments have allegedly been made and the same are not verifiable, the Assessing Officer co...

CITATION: S. 54: The date of "purchase" of the new residential house is the date when the assessee receives possession and not the date of the agreement of purchase (i) We find that the assessee has sold his flat for consideration of Rs.55 lacs on 24.02.2010 and this resulted into Long term capital gains of Rs.50,94,568/- after claiming indexation of cost of acquisition. The assessee claimed deduction u/s. 54 of the Act in respect to which he entered into an agreement for purchase of Flat with M/s. Sharpmind Developers on 28.12.2007. The relevant events relating to the transaction reads as under: Date of Purchase Agreement of under construction flat 28.12.2007 Date of Registration 28.02.2008 Date of Payment Rs. 9.35 L FY 07-08 Rs.10 L FY 08-09 Rs.10.71 L FY 09-10 Date of O/C 31.03.2009 Date of possession 11.09.2009 (ii) Before us the learned counsel for the assessee argued that the assessee entered into an agreement with M/s. Sharpmind Developers on ...

Rajeev B. Shah vs. ITO (ITAT Mumbai) S. 54F: If the assessee has made full payment to the builder for purchase/ construction of a new residential house but is not able to get the title of the flat registered in his name or is unable to get the possession of the flat within the prescribed period due to fault of the builder, the assessee cannot be denied deduction u/s 54F The assessee sold one plot of land for a consideration of Rs.19,35,325/- and claimed deduction of investment made in under construction flat in the month of March, 2010 amounting to Rs.18,60,000/- under the provisions of Section 54F of the Act. The AO disallowed the claim of the assessee for deduction u/s 54F of the Act for the reason that the assessee has not registered the document for his claim for purchase of property even after three years of the said investment of capital gains in property. He also made a passing reference that the genuineness of the investment in question is not proved. Accordingly, he disall...