The Assessee was a director and had given his personal guarantee to the SBI in respect of his company’s commercial borrowings. Later, SBI invoked the personal guarantee given by the assessee. SBI entered into an assignment agreement with Asset Reconstruction Co India Ltd (ARCIL). The land, which was offered as collateral security, was assigned to […]
CHHEDA HOUSING DEVELOPMENT CORPORATION VS. AD.CIT ITA No.: 86/Mum./2017 (ITAT Mumbai)
The Tribunal held that compensation received in lieu of extinction of right to sue is capital receipt not chargeable to tax. FACTS The assessee, a partnership firm, was engaged in the business of construction and development of property. During FY 2004-05, the assessee had entered into a MOU with landowner for the development of his […]
CO-OWNERSHIP AND EXEMPTION UNDER SECTION 54F
Individual or HUF assessee’s are exempted from payment of income tax on capital gains arising from the transfer of any long-term capital asset, (not being a residential house), u/s. 54F of the IT Act on the purchase or construction of a residential house within the specified period. The exemption is subject to fulfilment of the […]
PCIT VS. JAYA UDAY TULJAPURKAR [ITA 53 of 2017; dated 22nd April, 2019] (Bombay HC)]
Capital gains from sale of flat owned by a co-operative housing society on a piece of land which was granted under a long-term lease is eligible for deduction under section 54. Facts The father of the assessee was allotted a flat in a residential complex in a co-operative housing society. The complex was constructed on […]
SECTION 54F EXEMPTION WHEN ASSESSEE JOINTLY OWNS RESIDENTIAL HOUSE
Ashok G. Chauhan vs. ACIT [2019] 105 taxmann.com 204 (Mum) – Condition of not owning more than a residential house on the date of transfer of the original asset would mean absolute ownership. It does not cover within its sweep a case where the assessee jointly owns residential house together with someone else Facts The […]
CIT V ENAM SECURITIES (P.) LTD. [2012] 21 TAXMANN.COM 267 (BOM.)
The Assessee would be entitled to benefit of indexation under section 48 at the time of redemption of redeemable preference shares. Facts The assessee had subscribed to the purchase of 4 lakh preference shares each of Rs. 100/- of Enam Finance Consultants Pvt. Ltd. in 1992. The preference shares were to carry a dividend of […]
ANARKALI SARABHAI V. CIT 224 ITR 422 (SC), [1997] 90 TAXMAN 509 (SC)
The Supreme Court held that redemption of preference shares amounted to ‘sale, exchange or relinquishment of asset’ within meaning of section 2(47)(i) Facts of the Case The assessee is an individual and the assessment year under reference is AY 1969-70. The assessee held 297 redeemable preference shares of Universal Corporation Private Limited a company incorporated […]
EXEMPTION u/s 54EC/54/54F AVAILABLE IN RESPECT OF STCG u/s 50
According to section 50 of Income tax Act if an assessee has sold a capital asset forming part of block of assets (building, machinery etc) on which the depreciation has been allowed under Income Tax Act, the income arising from such capital asset is treated as short term capital gain. Section 50 modifies the provisions […]
SECTION 2(47) – CONVERSION OF CCPS INTO EQUITY SHARES DOES NOT AMOUNT TO TRANSFER
Convertible preference shares (CPS)/Cumulative Convertible Preference Shares (CCPS) are issued with the specific terms and conditions that after a certain period the CPS/CCPS shall be converted into equity shares (or other asset) at a pre-determined price or the price to be determined as per the prescribed formula. On conversion of a CPS/CCPS, preference shares are […]
SECTION 48 – MEANING OF FULL VALUE OF CONSIDERATION
Sec. 48 of the Act deals with the methodology to compute capital gains. Section 48 provides that the income chargeable under the head “Capital gains” shall be computed, by deducting cost of acquisition/improvement and expenditure incurred wholly and exclusively in connection with transfer from the full value of the consideration received or accruing as a […]