Case Law Details
Issue- Coming to the last year i.e. AY 2004-05, there is an issue about long term capital gains received by the assessee on acquisition of land at Rs. 1,65,35,891/- from GDA. The assessee has claimed the gains to be exempt u/s 54F on the plea that houses constructed by members are deemed to be the houses constructed by the society and as the amount invested in construction exceeds any long term capital gains received, the same is exempt u/s 54.
Held – The assessee’s claim of exemption u/s 54 is devoid of merits as the concept of mutuality has not been extended to the assessee besides the constructed houses or the properties of the respective members cannot be deemed to be purchased or construction of the houses belonging to the society. In view thereof, the claim u/s 54 has been rightly denied by AO and CIT(A).
INCOME TAX APPELLATE TRIBUNAL, DELHI
ITA Nos.4465/Del/2007 to 4470/Del/2007
Assessment Years: 1999-2000 to 2004-05
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One has all along come across any number of instances in which the FM and its coterie, in their wisdom , rather lack of it, mindlessly and with a vengeance, have been tinkering with the law (e.g income-tax and service tax) introducing the highly objectionable deeming concept. Now, in this reported case it is the assessee, in turn, who has chosen to follow the same route / the footsteps of, as that of its rulers.
The case is too mind- boggling and brain- stressing to offend offhand anyone’s normal understanding of the concept of ‘mutuality’. Proves so difficult for anyone having some tax knowledge and experience to understand much less appreciate the very issues raised and tackled.
Primarily, the advanced claim based on the so-called concept of ‘mutuality’ is prima facie an attempt in a cavalier fashion at twisting and tweaking violently the very concept itself; and goes against the grain of it as understood in legal parlance and accepted thus far. It is an outright meaningless exercise conceived of, and only fit to be ridiculed as a misadventure akin to a proverbial shot in the dark.
The earlier any such tomfoolery is effectively discouraged and curbed the better. Thereby save the Revenue from frittering away taxpayers’ monies in having been obliged to defending any such cases, where assesses try to raise and pursue points, which truly are ‘non-issues’ in every sense of the term.
Here is an unique opportunity for experts to , in a dispassionate manner, openly air their sincere views.