Case Law Details
Brief of the case:
In this case assessee with an intention to shift its industrial undertaking from urban to non-urban area sold its land, plant & machinery, building etc. and out of capital gain earned he made advance payments to various persons to purchase land, plant & machinery, building etc. Assessee claimed exemption on the entire capital gain earned from the sale proceed in view of the advances so made being more than the capital gain made by it. On appeal to supreme court by assessee Hon’ble SC held that under sub-section (1), the assessee is given a period of three years after the date on which the transfer takes place to purchase new machinery or plant and acquire building or land or construct building for the purpose of his business in the said area. Advances paid for the purpose of purchase and/or acquisition of the aforesaid assets would certainly amount to utilization by the assessee of the capital gains made by him for the purpose of purchasing and/or acquiring the aforesaid assets.
Facts of the case:
- The assessee is a private limited company which had an industrial unit at Majiwada, Thane, which was a notified urban area.
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