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TMI Blog1999 (10) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... arly debts secured by mortgage of the property transferred. Counsel contended that section 54E of the Income-tax Act is a beneficial provision intended to confer an advantage on the assessee and must be liberally construed so as to advance that object. It was also the submission of counsel that the method of calculation of capital gain under other provisions of the Act would have no bearing on the meaning to be assigned to the term "net consideration", for which a special definition has been provided in Explanation 5 to section 54E of the Income-tax Act. These arguments were advanced in the backdrop of the admitted factual position that the assessee had during the assessment year 1979-80, transferred immovable property for a total conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is part of Chapter IV and section "E" deals with the capital gains on the transfer of the capital assets in certain cases, where such gain is not to be charged to tax. The section opens with the words "where the capital gain arises from the transfer of a capital asset. . ." Section 54E(1)(a) provides that if the cost of the new asset acquired by utilising the capital gain arising from the transfer of the long-term capital asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 of the Act, and by clause (b) the extent of the exemption is made proportionate to the amount invested in the new asset, such proportion being calculated with reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en note of, is the total consideration received for the transfer. In this context, the terms "total" and "full value" would have the same meaning. The consideration may be received or it may accrue as a result of the transfer. The word "receive" does not necessarily connote the actual receipt of the cash into the hands of the assessee-transferor. The discharge of the transferor's liability can, in this Context, also be regarded as a receipt by the transferor to the extent to which part of the consideration is retained by the transferee for such discharge. The amount applied for such discharge is an amount, which comes out of the full value of the consideration and such amount is not a permissible deduction under Explanation 5. If the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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