Law:

Section:

I. Section 48 of the Income-tax Act, 1961 - Capital gains - Computation of (Expenses in connection with transfer) - Assessee received a property with clause in his mother's will providing overriding title in favour of his three sisters - He paid certain amount to his sisters so that in future they should not claim any right in property - A family settlement was accordingly reduced into writing - Assessee, after sale of said property, claimed such amount under section 48 and reduced it while working out capital gains - Whether since assessee's sisters had a title in property and without their co-operation there could not have been any sale, amount paid to them would be considered as expenditure in connection with transfer of property and would be reduced while computing capital gain - Held, yes [Para 8] [In favour of assessee] II. Section 54EC of the Income-tax Act, 1961 - Capital gains - Not to be charged on investment in certain bonds (Bonds, availability of) - Assessee sold a property - He invested certain amount out of sale consideration in REC Bonds and sought deduction under section 54EC - Assessing Officer rejected claim of assessee on ground that investment was not made within six months - Whether since REC Bonds were not available on date when period of six months for making such investment expired and as soon as said bonds become available investment had been made at earliest possible opportunity, exemption under section 54EC was to be allowed to assessee - Held, yes - Whether section 54EC does not stipulate that investment had to be in any bond which is available and, hence, assessee could not be forced to invest in bond whichever was available because period of six month was about to expire - Held, yes [Para 12] [In favour of assessee] FACTS-I â–  The assessee's mother 'K' executed a will by which she divided her residential bungalow into two parts, out of which ground floor was given to assessee and first floor was given to assessee's brother 'P'. 'P' expired. He made a will and bequeathed his share in name of his three sisters. The assessee then purchased construction of first floor for certain amount. â–  The assessee's mother had also…

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