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Interpretation of Section 54E of the Income Tax Act regarding the entitlement to relief for capital gains on the transfer of assets. Detailed Analysis: 1. Issue: Interpretation of Section 54E of the Income Tax Act. The case involved an appeal by the assessee against the order of CIT(A) regarding the entitlement to relief under Section 54E of the Income Tax Act. The main issue was whether the assessee is entitled to relief under Section 54E only to the extent of a specific amount. The facts revealed that the assessee had released her interest in a property and received consideration in instalments. The dispute arose as the assessee had not deposited the entire consideration in fixed deposits within the statutory period of 6 months after the date of transfer, as per the Income Tax Officer's assessment. The CIT(A) upheld the ITO's decision, leading to the appeal before the Appellate Tribunal. 2. Analysis: The assessee's counsel argued that the assessee should not be denied the benefit of Section 54E as she had received the consideration in instalments and deposited the amounts accordingly. The Departmental Representative contended that the transfer occurred when the assessee agreed to relinquish her interest, and failure to deposit the investment within 6 months rendered the assessee ineligible for relief. The Tribunal considered the material on record, which confirmed that the assessee had entered into an agreement and received consideration in instalments. The Tribunal analyzed the dates of receipt and deposit of the consideration amounts in different banks as per the agreement. 3. Decision: The Tribunal interpreted Section 54E, emphasizing that the crucial factor for relief eligibility is the receipt of consideration for the transfer. The Tribunal ruled that the date of transfer should not solely determine the entitlement to relief; rather, it should align with the actual receipt of consideration. Therefore, the Tribunal held that the assessee should deposit the consideration in specified assets within 6 months from the date of receipt, as per the agreement terms. The Tribunal set aside the CIT(A)'s order and remitted the matter back to the ITO to determine the exact dates of receipt and deposit for granting the benefit of Section 54E, ensuring the assessee's right to be heard. 4. Conclusion: The appeal was allowed for statistical purposes, with the Tribunal clarifying the interpretation of Section 54E and emphasizing the importance of aligning the deposit timeline with the actual receipt of consideration for the transfer. The decision provided clarity on the eligibility criteria for relief under Section 54E of the Income Tax Act, ensuring a fair assessment of the assessee's entitlement based on the specific circumstances of the case.
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