Case Law Details
Rajamanikam Meerabai Vs ITO (ITAT Chennai)
Introduction: This article delves into the recent order by ITAT Chennai concerning the dispute between Rajamanikam Meerabai and the Income Tax Officer (ITO) related to capital gains. The order, arising from an appeal against the Commissioner of Income Tax (Appeals) decision, focuses on the computation of long-term capital gains and the denial of exemption under section 54 of the Income Tax Act for the assessment year 2006-07.
Detailed Analysis:
1. Background and AO’s Action: Rajamanikam Meerabai sold a residential house in the financial year 2005-06 for Rs. 17.50 lakhs, investing the entire sale consideration in a plot at Tiruvanmiyur. The AO, however, denied the exemption under section 54, claiming that the transfer occurred in the assessment year 2006-07. The dispute centers around the date of transfer and the subsequent capital gain computation.
2. CIT(A)’s Confirmation: The Commissioner of Income Tax (Appeals) upheld the AO’s decision, dismissing Meerabai’s claim that the property transfer took place in the financial year 2007-08. CIT(A) relied on an affidavit and sale agreement, stating that vacant possession was handed over in February 2006, making the transfer valid for the assessment year 2006-07.
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