INCOME TAX ACT, 1961

Section 45

Capital gains - Assessee was denied exemption under sections 54B and 54F because land was purchased in name of his sons - Question of charging capital gains in assessee's name -

Assessee was denied exemption claimed under sections 54B and 54F on allegation that new piece of land was purchased by assessee in names of his two sons. Assessee contended that at time of transfer of property, he had no right over same except amount received in capacity of an approver. He further contended that family partition took place before effecting transfer of property and land in question was partitioned in favour of his sons. Thereafter, assessee took a plea that since he was not considered as owner, therefore, capital gains was not chargeable in his hands. Held: Once assessee was not owner of the property, there could obviously have been no question of allowing exemption under sections 54B or 54F. To that extent, view taken by CIT(A) was correct. Once assessee was not entitled to exemption because he was not owner of the property transferred, there could be no question of computing any capital gain in his hands from the transfer of the same property. Assessee did compute capital gain in his return of income and thereafter claimed exemptions under sections 54B and 54F of the Act. Simply because such a computation of capital gain was made on an ill-advice, cannot bind the assessee for the times to come, if, in fact, he was not liable for such capital gain.

REFERRED :

FAVOUR : Partly in assessee's favour

A.Y. : 2012-13

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