The Tax Publishers2020 TaxPub(DT) 2973 (Mum-Trib)

INCOME TAX ACT, 1961

Section 54EC

Since there is no distinction between transfer of title and completion of sale; and title passes only when document is registered under the Registration Act, thus, mere fact that such transfer operates from date of execution was not sufficient to conclude that title itself passes on date of execution, consequently, transfer in instant case could not be deemed to be expected on date of execution of document, so as to deny exemption under section 54EC.

Capital gains - Exemption under section 54EC - Date of transfer to compute time period to make investment in terms of section 54EC - Registration of documents vis-à-vis Execution of sale document

Revenue denied exemption claimed under section 54EC alleging that investment in NHAI was made beyond prescribed time period of six months from date of transfer. Revenue alleged that transfer in instant case was completed on date of execution of sale document. Held: In view of provisions of Registration Act and Transfer of Property Act, transfer of immoveable property is complete only when the registration of sale is completed. Though, as per section 47 of Registration Act it may relate back from the date of execution of document. There is no distinction between transfer of title and completion of sale; and title passes only when document is registered under the Registration Act. The mere fact that such transfer operates from date of execution was not sufficient to conclude that the title itself passes on the date of execution. Consequently, transfer in instant case could not be deemed to be expected on date of execution of document.

REFERRED : Alapati Venkataramiah v. CIT (1965) 57 ITR 185 (SC) : 1965 TaxPub(DT) 0294 (SC), CIT v. Munnalal Shrikishan (1987) 167 ITR 415 (All) : 1987 TaxPub(DT) 1420 (All-HC), Amarchand J. Agarwal v. Union of India & Ors. (and Other Writ Petitions) (1983) 142 ITR 402 (Bom.) : 1983 TaxPub(DT) 0464 (Bom-HC) and Alkaben B. Patel v. Income Tax Officer (2014) 43 taxmann.com 333 (Ahd) (SB) : 2014 TaxPub(DT) 1734 (Ahd-Trib).

FAVOUR : In assessee's favour.

A.Y. : 2013-14

IN THE ITAT, MUMBAI BENCH

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT