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    Case Study 6

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    DrPreeti Jindal
    The assessee claimed exemption under Section 54 of the Income Tax Act for capital gains reinvested in constructing a residential house on leased land. As per the lease agreement, the assessee had the right to construct a building and own it for the lease period of 20 years, after which ownership would transfer to the lessor. However, the assessing officer denied the exemption, questioning whether construction on leased land qualified for Section 54 exemption. The issue is to determine whether the exemption under Section 54 applies in this case of construction on leased land.

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    Case Study 6

    Uploaded by

    DrPreeti Jindal
    14 views1 page
    The assessee claimed exemption under Section 54 of the Income Tax Act for capital gains reinvested in constructing a residential house on leased land. As per the lease agreement, the assessee had the right to construct a building and own it for the lease period of 20 years, after which ownership would transfer to the lessor. However, the assessing officer denied the exemption, questioning whether construction on leased land qualified for Section 54 exemption. The issue is to determine whether the exemption under Section 54 applies in this case of construction on leased land.

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    The assessee claimed exemption under Section 54 of the Income Tax Act for capital gains reinvested in constructing a residential house on leased land. As per the lease agreement, the assessee had the right to construct a building and own it for the lease period of 20 years, after which ownership would transfer to the lessor. However, the assessing officer denied the exemption, questioning whether construction on leased land qualified for Section 54 exemption. The issue is to determine whether the exemption under Section 54 applies in this case of construction on leased land.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    14 views1 page

    Case Study 6

    Uploaded by

    DrPreeti Jindal
    The assessee claimed exemption under Section 54 of the Income Tax Act for capital gains reinvested in constructing a residential house on leased land. As per the lease agreement, the assessee had the right to construct a building and own it for the lease period of 20 years, after which ownership would transfer to the lessor. However, the assessing officer denied the exemption, questioning whether construction on leased land qualified for Section 54 exemption. The issue is to determine whether the exemption under Section 54 applies in this case of construction on leased land.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
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    Case: Shivakumar Kheny (HUF) v. ITOITA No.

    792/Bang/2019 (Capital Gain)


    FACT
    The Assessee took land on lease for a period of 20 years dated 14.3.2013 and constructed a residential
    house on such land. The amount of capital gain to the extent it was so utilized was claimed as deduction
    u/s.54 of the Act. As per the lease dated 14.03.2013, the Assessee entitled to construct a building after
    reimbursing a sum of Rs.4.9 Lakhs already spent by the lessor. As per clause 10, the ownership and title
    to the residential building (except the land) would vest in the Assessee for the period of lease and
    thereafter the title in the building will vest with the lessor. Assessee sold certain property and claimed
    exemption under Section 54 as regards capital gain utilized towards construction of a residential on
    leasehold land.

    ISSUE
    Determine whether the exemption u/s 54 of the act will be applicable or not?

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