Search Results For: long-term capital gains


QUERY: An Assessee, inadvertently due to mistake of Law, made a wrong Choice of option in computing the Long Term Capital Gains on Sale of Ancestorial House Property by deducting from the Sale Price, the value of the House Property as on 1-4-1981 as per the Valuation Report and paid Tax @10%.

The Learned Assessing Officer completed the Assessment under Section 143(1) of the Income-tax Act, 1961, and made demand for interest under Section 234B and Section 234C of the Income-tax Act, 1961.

Then, it was discovered that, had the Assessee deducted the indexed value of the House Property from the Sale Proceeds and paid Tax @ 20%. There would have been substantial Refunds.

The Assessee made an Application under Section 154 of the Income-tax Act, 1961, for rectification of the mistake of law committed by the Assessee in making wrong choice because of ignorance, which was rejected by the Learned Assessing Officer.

The Learned Commissioner of Income Tax (Appeals) also rejected the Assessee’s Appeal on the grounds that, that mistake would have been rectified by submitting a Revised Return. Since the time for filing of Revised Return of Income has expired, the Assessee has no remedy.

May we request you to suggest the Remedy in this particular situation, as per the Spirits and Legislations and Departmental Circular No. 14(XL 35) of 1955 dated 1-4-1955, which both the Assessing Officer as well as the Learned Commissioner of Income Tax (Appeals) rejected on the grounds that, the Circular being issued prior to 1961, is obsolete under what provisions of law CBDT may be approached for granting the relief.

I shall appreciate your considered response, at an early date.
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From the facts it is not clear for which assessment year the intimation was issued under section 143(1) of the Act and whether assessment under section 143(3) is pending or not? Further date of intimation is also not mentioned.

QUERY: Section 54EC caps exemption at Rs. 50 lakhs, whether caps of Rs. 50 lakhs:

(a) Is applicable qua assets sold?

(b) Whether assessee can claimed exemption only in one year

(c) Whether limit of Rs. 50 lakhs is applicable to each financial year, if yes, then can assessee invest Rs. 50 lakhs in two financial years, falling within a period of six months after date of transfer?
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(a) No, section applies to assets sold during the year and not the qua asset.

(b) The exemption should be claimed in the year in which long-term gain arises and invested in long-term specified assets within six months from the date of transfer.

QUERY: I sold my residential house property for Rs. 1.2 crores in December, 2013 which I wanted to re-invest in NHAI bonds. I understand that the investment in NHAI bonds needs to be made within 6 months from the date of sale and the restriction for such investment is Rs. 50/- lakhs per financial year. Accordingly, I made a plan of invest Rs. 50/- lakhs in January, 2014 once and again in May, 2014 Rs. 50 lakhs whether I would get a exemption of Rs. 1/- crore from long term capital gain tax. However, my advisor informed me that there are some litigations involved in this point. Can you please clarify what exactly is the litigation involved and how it can be mitigated?If that is so why is this restriction of Rs. 50/- lakhs per financial year has been prescribed in the Act?
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Yes, In ITO v. Ms. Rania Faleiro [142 ITD 769] the Panji Tribunal has held as un-der:

“The plain reading of section 54EC(1) as well as the proviso thereto clearly sug-gests that the limit of Rs. 50 lakhs as given under the proviso is as per person per financial year. There is no ambiguity in the interpretation, Had there been an intention of the legislature to restrict the exemption of Rs. 50 lakhs, the legislature would have provided the embargo in this regard

QUERY: A NRI Tax Payer in 2003, booked a Flat in Kolkata, basically for investment purposes.

A Three Room Flat with specific Flat No. 32G, was allotted to him in May 2004. He went on paying the Price as per the Agreement, aggregating to Rs. 34,62,659/-, according to the progress of the Building Construction.

In 2006, he decided to return to Kolkata permanently and has been looking for a Residential Flat for his residence. He got a bigger 4 Bed Room Flat No. 31J in the same building. He made an initial payments of Rs. 8,35,200/- to the allottee of the said Flat No. 31J, as commitment money, with a clear understanding that, on his return to Kolkata, he will sell the Flat No. 32G allotted to him and pay the balance amount of Rs. 67,00,000/-.

He returned to Kolkata permanently on 31-1.2008 and sold the flat allotted to him on 3-6-2009 for net Sale Price of Rs. 67,00,000/- and paid for the bigger Flat No. 31J, the balance of the agreed amount.

He took the Physical Possession of the bigger Flat No. 31J on 13-11-2008.

Now, the question is, whether the Capital Gain on Sale of the Flat No. 32G, allotted to him in the Year 2004, after FIVE Years of the date of allotment would be considered as a Long Term Capital Gains and the said Capital Gains on an Investment for Residential Flat within one year from the date of sale will be an exempted income in terms of the Provisions contained in section 54 and/or section 54F of the Income-tax Act, 1961.
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A right in Flat No. 32G was acquired in May, 2004, which was under construction. For which he made payments in instalments. The said right was sold by him on 3-6-2009 without taking the possession of the said flat.

QUERY: Assets being land and building acquired on 1-8-1978 for Rs. 2,00,000/- and being used in business on which year to year Depreciation allowed W. D. V. as on 1-4-2009 come to Rs. 20,000/-. The Assessee sold the entire depreciated property on 25-3-2010 for consideration of Rs. 10,00,000/-.

What will be taxable income as business income, long term capital gain, short term capital gain and tax liability.
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From the query, it is not clear whether the building forms a part of block of assets, as no depreciation is allowable on the land as per CIT vs. Alps Theatre 165 ITR 377 (SC). Followed by the Delhi Tribunal in Dy. CIT vs. Capital Caps (P) Ltd. 114 ITD 286.

QUERY: ‘A’ has purchased a plot in March, 2010 for Rs. 10/- lakh and spent Rs. 5/- lakh for construction during F.Y. 2011-12, and Rs. 5/- lakh during the F. Y. 2012-13. He sold the entire house in December, 2014 for Rs. 50 /- lakh Whether it is long-term or short-term gain?
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Section 2(29A) defines “Long term capital asset” which means a capital asset which is not a short term capital asset. Section 2 (42A) defines “Short term capital asset” which means a capital asset held by an assessee for not more than thirty six months, other than listed shares. In that case, a period of not more than the twelve months to be considered for short term capital asset.

QUERY: An individual booked a flat in a building in April 2012, allotted flat no. A-1. Building is completed in March 2015 and possession given. The flat is resold in May 2016 whether it will be long term capital gain or short term capital gain
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It is a long term capital gain as per Punjab and Haryana High Court in Mrs. Madhu Kaul v. CIT [363 ITR 54]. In that case, the assessee was allotted a flat on June 07, 1986 conveyed on June 30, 1986. The assessee paid the first installment on July 04, 1986. The flat was later identified and delivery of possession was given on November 30, 1988.

QUERY: ‘A’ has purchased a plot in March, 2010 for Rs. 10/- lakh and spent Rs. 5/- lakh for construction during F.Y. 2011-12, and Rs. 5/- lakh during the F. Y. 2012-13. He sold the entire house in December, 2014 for Rs. 50 /- lakh Whether it is long-term or short-term gain?
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Section 2(29A) defines “Long term capital asset” which means a capital asset which is not a short term capital asset. Section 2 (42A) defines “Short term capital asset” which means a capital asset held by an assessee for not more than thirty six months, other than listed shares. In that case, a period of not more than the twelve months to be considered for short term capital asset