Law:

Section:

Section 53 of the Income-tax Act, 1961 [Corresponding to section 12B(4) of the Indian Income-tax Act, 1922] - Capital gains - Exemption of, or sale of residential house - Assessment year 1961-62 - Assessee executed sale deeds in respect of certain property in favour of nominees of purchaser between 15-3-1961 and 20-10-1962 and purchased bungalow for residential purposes on 24-11-1961 - Subsequently, assessee claimed benefit of section 12B(4)(b) of 1922 Act - Benefit claimed by assessee was disallowed by ITO on ground that sale of property was not finalised as claimed by assessee - Whether since sale of property took place between 15-3-1961 to 20-10-1962, it was clear that purchase of bungalow by assessee on 24-11-1961 was within time prescribed under section 12B(4), hence, assessee was entitled to benefit of that section - Held, yes FACTS The assessee, entered into an agreement with 'C' on 8-2-1960. Under the agreement the assessee was to convey certain property in favour of the purchaser for a sum of Rs. 4,35,000. A further stipulation between the parties was that the sale deeds should be executed either in favour of 'C' or his nominees. A sum of Rs. 1,00,000 was paid and there remained a balance of Rs. 3,35,000 which was to be paid before 31-5-1960. The balance was paid on two dates, 15-9-1960, and 13-11-1960. As per the stipulation, sale deeds were executed in favour of the nominees of 'C', the first of which was on 15-3-1961, and the last on 20-10-1962. On 24-11-1961, the assessee purchased some other bungalow for his residential purpose for Rs. 94,850. The assessee, on that basis, claimed the benefit of section 12B(b). The benefit claimed by the assessee was disallowed in the first instance on the view that the sale was not finalised as maintained by the assessee in December, 1960, and that the full payment for the transactions had been received by 13-11-1960. The ITO thought that the transfer took place long before December 1960, particularly because the 'M' Limited, which by an arrangement with 'C' paid the balance of consideration, was arranging to let out the property. The AAC took, however, a different view. He considered that the sale of the property…

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