Topic
Long-term capital gain in Indian tax law refers to profit from selling capital assets held for more than 24 months, subject to specific exemptions and indexation benefits under the Income Tax Act.
ITAT Pune rules that substantial payment and possession transfer under an agreement to sell qualifies for Section 54F exemption, even if the sale deed is registered years later. This clarifies that formal registration delay does not invalidate the exemption claim, offering relief to taxpayers in similar transactions.
The ITAT Agra has ruled that the purchase price of a residential plot acquired within one year before selling a commercial asset can be included in the cost of acquisition for claiming capital gains exemption under Section 54F, provided documentary proof is submitted. This clarifies a critical ambiguity for investors restructuring assets and expands the scope of eligible investments beyond construction costs alone.
The ITAT Jabalpur ruled that when land is partially sold after conversion, the cost of acquisition for long-term capital gains must be calculated on the entire original parcel, not just the portion sold. This prevents artificial inflation of gains and ensures fair valuation under Section 50C, directly impacting landowners and developers who subdivide and sell plots.
ITAT Delhi ruled that Long Term Capital Gains (LTCG) exemption under Section 10(38) cannot be denied merely on suspicion of penny stock transactions if the assessee provides documentary evidence. The tribunal emphasized that the Revenue must disprove genuineness with concrete proof, not assumptions, impacting tax assessments for high-value share transactions.
ITAT Nagpur rules that additions under Sections 68 and 69C for long-term capital gains from listed shares cannot be sustained without concrete evidence disproving the genuineness of transactions. The tribunal emphasizes that mere suspicion cannot override documentary proof, setting a precedent for tax assessments involving LTCG claims.
The ITAT Mumbai has ruled that payments made toward a new residential property before the one-year window preceding the sale of the old asset still count toward the cost of acquisition for Section 54 exemption. This clarifies that the entire investment, not just amounts paid within the statutory period, can be aggregated to fully offset long-term capital gains, benefiting taxpayers who make advance payments in real estate transactions.
ITAT Pune rules that Rs. 7.84 crore paid as compensation for cancelled share sale agreements qualifies as a deductible business expense under Section 48 of the Income Tax Act, provided the recipients have paid tax on the amount. The ruling clarifies that contractual compensation, even for failed transactions, is not a colourable device if properly taxed, offering relief to taxpayers in similar disputes.
ITAT Delhi rules that Long Term Capital Gains exemption under Section 10(38) cannot be denied without concrete evidence linking the assessee to bogus transactions. The tribunal set aside additions made solely on departmental investigations, reinforcing the need for direct proof in tax disputes.
ITAT Lucknow rules that the Assessing Officer must refer valuation disputes to the Departmental Valuation Officer under Section 50C before making Long Term Capital Gains additions, even if the assessment deadline is imminent. The tribunal set aside the addition, reinforcing statutory compliance over procedural expediency in tax assessments.
ITAT Mumbai rules that for capital gains computation under Section 50C, the stamp duty value as on the date of the Memorandum of Understanding (MOU) applies, not the registration date, if procedural delays cause the transfer. This holding impacts taxpayers facing delays in property transfers, ensuring fair valuation for tax purposes.
ITAT Mumbai holds that charitable trusts can claim indexation benefit on long-term capital gains under Section 48 even while claiming exemption under Section 11, clarifying double deduction myths.