Law:

Section:

Section 10(19A) of the Income-tax Act, 1961 - Exemption - Income of ex-ruler of princely state - Assessee, an ex-ruler, claimed exemption in respect of rental income earned from a part of his official residence let out by him, of which remaining portion was in his self-occupation - Whether rental income so earned was exempt under section 10(19A) - Held, yes Section 52(2) of the Income-tax Act, 1961 - Capital gains - Under statement of consideration for transfer - Assessee sold certain property, sale consideration of which was held by ITO to be understated - Tribunal, however, held that said transaction was genuine and there was no material to show that assessee received any additional amount in that transaction - Whether in view of Tribunal's clear finding of fact, section 52(2) was not attracted - Held, yes Facts-I The assessee, an ex-ruler, claimed exemption under section 10(19A) in respect of rental income earned from a part of the official residence let out by him while retaining the remaining portion of that building for self-occupation. The Tribunal allowed the assessee's claim. On reference : Held-I It was held in the case of CIT v. Bharatchandra Banjdeo [1955] 154 ITR 236 (MP), that even if only a part of the palace, which was declared as official residence, was in self-occupation of the former ruler, and the rest had been let out, the exemption under section 70(19A) would be available to the entire palace. The view taken in said decision was undoubtedly a plausible view and in the case of a taxing statute, a plausible view in the assessee's favour should be preferred. Hence, in the instant case, the impugned rental income of the assessee was exempt under section 10(19A). FACTS-II The assessee sold certain property, the sale consideration of which, as shown in the sale deed, was found by the ITO to be understated. The AAC also held the same view. On second appeal, the Tribunal held that section 52(2) was not attracted, since the transaction was genuine and there was no material to show that the assessee received any additional amount towards sale consideration in that transaction. On reference : HELD-II The Tribunal's finding that the transaction was…

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