| Case ID |
185de764-fd12-4907-bb84-cf57f5762129 |
| Body |
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| Case Number |
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| Decision Date |
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| Hearing Date |
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| Decision |
The Madras High Court upheld the Tribunal's decision that capital gains should be calculated based on the actual consideration received for the part of the property transferred. The court noted that the assessing authority's calculation based on the total consideration was incorrect since the assessee had only received Rs. 22 lakhs for the one-third of the property transferred. The court clarified that the assessment must reflect the transfer of possession in proportion to the consideration received, affirming that the law permits such dissection of the contract under section 2(47)(v) of the Income-tax Act. The Tribunal's interpretation was consistent with previous case law, which allows for capital gains to be calculated in parts, provided the conditions of transfer under section 53A of the Transfer of Property Act are met. |
| Summary |
In the case of Commissioner of Income Tax v. K. Jeelani Basha, the Madras High Court examined the provisions of section 2(47) of the Income-tax Act, 1961, concerning capital gains taxation. The central issue was whether capital gains should be assessed based on the total consideration of Rs. 57 lakhs for the entire property, or only on the Rs. 22 lakhs received for the one-third of the property transferred during the assessment year 1992-93. The court ruled that the assessment should be made based on the actual consideration received for the portion of the property transferred. This ruling aligns with the principles established in previous cases, emphasizing the importance of accurately reflecting the transfer of possession and the corresponding financial implications. The case highlights the necessity for tax assessments to align with the actual transactions undertaken by the parties involved and reinforces the legal framework surrounding capital gains taxation under the Income-tax Act. This decision is significant for taxpayers and practitioners alike, as it clarifies the interpretation of capital gains in relation to partial transfers of property, ensuring that assessments are fair and reflect real economic transactions. |
| Court |
Madras High Court
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| Entities Involved |
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| Judges |
V.S. Sirpurkar,
K. Raviraja Pandian
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| Lawyers |
Mrs. Chitra Venkataraman,
C.V. Rajan
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| Petitioners |
Commissioner of Income Tax
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| Respondents |
K. Jeelani Basha
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| Citations |
2002 SLD 2623 = (2002) 256 ITR 282
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| Other Citations |
CIT v. Shakuntala Rajeshwar [1986] 160 ITR 840/29 Taxman 215,
Alapati Venkataramaiah v. CIT [1965] 57 ITR 185 (SC)
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| Laws Involved |
Income-tax Act, 1961
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| Sections |
2(47)
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