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Tax Publishers K. Babu (HUF) v. ITO [ITA No. 942/Bang/2017, dt. 19-11-2020] : 2020 TaxPub(DT) 4899 (Bang-Trib) Amendment in section 54F whether to be read as singular property or multiple property under a swap of constructed property for land given in a JDA *Facts:* Assessee along with two others owned a piece of land which was given to a developer under a Joint Development Agreement. The assessee did not offer any capital gains in the return and in a notice under section 148 the issue of capital gains arose. It was the case of the revenue that the capital gains be taxed on handing over of the possession of the said land while the assessee's case was that it would be only on the delivery of the constructed flats. In return of the JDA the assessee was to receive 10 units of flats in lieu of this share of land. The assessing officer taxed the market value of the 10 flats less the indexed cost of acquisition of the land. The assessee though he contested the taxability of capital gains claimed section 54F in respect of one of the 10 units and before Commissioner (Appeals) also it was thus. On higher appeal to ITAT assessee took a plea that the amendment in section 54F restricting to one residential house instead of "a" residential house be extended to all the 10 units thus once they become eligible for exemption under section 54F for the entire 10 units no capital gains can be levied at all. Held in favour of the assessee that they were entitled to section 54F exemption on the entire 10 units and not on 1 unit. Amendment in section 54F is only prospective. On account of the exemption under section 54F the entire issue of taxability of capital gains becomes otiose. *Applied:* CIT v. K.G. Rukminiamma (2011) 331 ITR 221 (Karnataka-HC) : 2011 TaxPub(DT) 0429 (Karn-HC) Smt. Nethravathi v. ITO in ITA No. 2630/Bang/2017 for Assessment Year 2014-15, Order, dated 25-4-2018 Bangalore ITAT CIT v. Smt. V.R. Karpagam, Tax Appeal No. 301 of 2014 Judgment, dated 18-8-2014 (Madras-HC) : 2014 TaxPub(DT) 4009 (Mad-HC) CIT v. Gumanmal Jain (2017) 80 taxmann.com 21 (Madras-HC) : 2017 TaxPub(DT) 1680 (Mad-HC)

Tax Publishers

K. Babu (HUF) v. ITO [ITA No. 942/Bang/2017, dt. 19-11-2020] : 2020 TaxPub(DT) 4899 (Bang-Trib)

Amendment in section 54F whether to be read as singular property or multiple property under a swap of constructed property for land given in a JDA

Facts:

Assessee along with two others owned a piece of land which was given to a developer under a Joint Development Agreement. The assessee did not offer any capital gains in the return and in a notice under section 148 the issue of capital gains arose. It was the case of the revenue that the capital gains be taxed on handing over of the possession of the said land while the assessee's case was that it would be only on the delivery of the constructed flats. In return of the JDA the assessee was to receive 10 units of flats in lieu of this share of land. The assessing officer taxed the market value of the 10 flats less the indexed cost of acquisition of the land. The assessee though he contested the taxability of capital gains claimed section 54F in respect of one of the 10 units and before Commissioner (Appeals) also it was thus. On higher appeal to ITAT assessee took a plea that the amendment in section 54F restricting to one residential house instead of "a" residential house be extended to all the 10 units thus once they become eligible for exemption under section 54F for the entire 10 units no capital gains can be levied at all.

Held in favour of the assessee that they were entitled to section 54F exemption on the entire 10 units and not on 1 unit. Amendment in section 54F is only prospective. On account of the exemption under section 54F the entire issue of taxability of capital gains becomes otiose.

Applied:

CIT v. K.G. Rukminiamma (2011) 331 ITR 221 (Karnataka-HC) : 2011 TaxPub(DT) 0429 (Karn-HC)

Smt. Nethravathi v. ITO in ITA No. 2630/Bang/2017 for Assessment Year 2014-15, Order, dated 25-4-2018 Bangalore ITAT

CIT v. Smt. V.R. Karpagam, Tax Appeal No. 301 of 2014 Judgment, dated 18-8-2014 (Madras-HC) : 2014 TaxPub(DT) 4009 (Mad-HC)

CIT v. Gumanmal Jain (2017) 80 taxmann.com 21 (Madras-HC) : 2017 TaxPub(DT) 1680 (Mad-HC)