Case Law Details
Shri I. Seshagiri Rao Vs ITO (ITAT Hyderabad)
The issue under consideration is whether the capital gains will be applicable where assessee signed a release deed waiving all his rights, title and interests in the property?
During the assessment, the A.O. found that the assessee had entered into a release deed and also a supplementary release deed by which assessee has released his rights in the property and has also received the entire sale consideration. It was noted that the assessee has received entire sale consideration and in his return of income, the assessee has declared the capital gain and has claimed exemption under section 54F of the Act. Therefore, AO held that there is a transfer during the relevant PY and capital gain arising therefrom is liable to tax during the relevant AY. With regard to claim of exemption under section 54F of the Act, the AO held that the assessee is eligible for an exemption to the extent of Rs.34,00,750/- and the balance of capital gain of Rs.44,55,770/- was brought to tax.
ITAT state that the assessee and others have entered into release deed, wherein it is stated that the private company M/s Asrani Inns & Resorts P Ltd. had purchased a property at Boggulkunta and the entire sale consideration was paid by the company and that the names of other purchasers were included and shown as purchasers in the sale deed merely for the sake of convenience and that none of the purchasers have any beneficiary rights, title/interest therein. Further, assessee himself has declared the capital gain in his return of income and has claimed exemption u/s 54F of the Act. Therefore, irrespective of the date when the release deed has been registered, there is a transfer of shares. Therefore, ITAT finally state that the Capital gain will be levied in this case. Hence appeal filed by the assessee is rejected.
FULL TEXT OF THE ITAT JUDGEMENT
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