June 2014
Capital gain: Short-term or long-term: Exemption u/s. 54EC: A. Y. 2008-09: Assessee paid 96% of consideration by October 1999: Got possession of land on 12-12-2005: Sold the land on 09-01- 2008 and invested in section 54EC Bonds: Capital gain is long-term capital gain: Assessee is entitled to exemption u/s. 54EC:
By K. B. Bhujle, Advocate
Reading Time 2 mins
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CIT vs. K. Ramakrishnan; 363 ITR 59 (Del):
Under an agreement to purchase a land the assessee had paid 96% of the consideration by October 1999. The assessee got possession of the land on 12-12-2005. The assessee sold the land on 09-01-2008 and invested in section 54EC Bonds. The assessee claimed that the capital gain is a long term capital gain and is exempted u/s. 54EC of the Income-tax Act, 1961. The Assessing Officer held that the capital gain is a short-term capital gain and accordingly disallowed the exemption u/s. 54EC of the Act. The Tribunal allowed the assessee’s claim.
On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under:
“i) The assessee acquired the possession of the plot on 12th December, 2005, and sold through a registered sale deed dated 9th January, 2008. This Court is of the opinion that having regard to the findings recorded by the Tribunal, the assessee had acquired the beneficial interest to the property at least 96% of the amount was paid by 3rd October, 1999.
ii) In view of the reasons the court is satisfied that the Tribunal’s impugned order does not disclose any error calling for interference. The appeal is accordingly dismissed.”
