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TMI Blog2020 (11) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... property to the other person, while a gift deed is a deed by which one person gifts his legal right in a property to any person. Relinquishment may or may not be for consideration but a gift does not require any consideration. In the instant case also all 4 co-owners have relinquished their rights in the said property without receiving any consideration. The said relinquishment of rights in the said property are in the nature of gift only as no consideration have been received and genuineness of the relinquishment deed has not been disputed by the authorities below. Section 47 provides for the transactions which are not regarded as transfer. If the case of a person does not fall u/s 47 of the Act then only all the remaining provisions of section 45 to 55A come into operation, which also includes substantial provision for full consideration in certain cases i.e. section 50C of the Act. As far as, the case in hand is concerned as we have held above that the alleged transaction is in the nature of gift/relinquishment of rights. There is no doubt that there is a transfer of the immovable property as provided in section 2(47)(i) of the Act but this being a definition of transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,82,950/-. Subsequently, proceedings u/s 147 of the Act were initiated after issuing a valid notice u/s 148 of the Act and supplying the reason for reopening to the assessee. Assessee stated that regular return of income may be treated as return filed. In response to notice u/s 148 of the Act assessee also filed objections to the reason recorded for reopening and the same were duly dealt by the ld. AO. Necessary notice u/s 142(1) of the Act was also served upon the assessee. During the course of assessment proceedings qua the reason for which the assessee s case was reopened. Ld. AO observed that there was a transaction of sale of immovable property wherein four co-owners relinquished their rights in the immovable property without receiving any sale consideration. Ld. AO observed that market value of this property as per Stamp Valuation Authority is ₹ 61,72,500/-. Ld. AO asked the assessee as to why not the provisions of capital gain should be attracted on the sale of property to which the assessee replied that the alleged transactions is in the nature of gift and the same is not treated as transfer for the purpose of computing capital gain as provided in section 47(iii) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther co-owner relinquished his share in the land situated at Berkheda Nathu, Patwari Halka No. 33, Vikas Khand Fanda, Tehsil Huzur, District Bhopal vide relinquish deed dated 27th September, 2009 without any consideration (Copy filed at page No.5 to 11 of the paper book). 2.That at the time of assessment proceedings the ld. AO was informed vide written submissions dated 23rd March, 2015 that the relinquishment amounts to gift which is exempt U/S 47(iii) of the Income Tax Act (Copy filed at page no. 15 to 16 of the paper book). The relevant para 4 of written submission dated zs= March, 2015 appearing at page no.16 of paper book is reproduced as under .. 4. We have been asked to show cause why Relinquishment of Rights share of property be treated as Short Term Capital Gain considering the Relinquishment of Rights as transferred within meaning of section 2(47)(i) of the Income Tax Act. In this regard we draw your kind attention to our objections raised to the proceeding u/s 147 which were filed before you on lh March, 2015 vide a separate letter. In this regard we submitted that for the whole proceeding u/s 147, the cause of action arisen because AD as invoked section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ict Bhopal, without consideration have been held to be non-taxable. 8.That the Learned Assessing Officer and Learned CIT(A) have failed to considered that section SOC is special provision whereby the value adopted or assessed or assessable by any authority of state government shall be deemed to be the full value of consideration received or accruing for the purposes of section 48. Section 48 deals with the Mode of computation of the Income chargeable under the head income tax under the head capital gains for which section 45 is the charging section. Section 47 deals with Transaction not regarded as transfer and states that nothing contained in the section 45 shall apply to transfers stated thereunder. Clause (iii)of section 47 reads as under Transaction not regarded as transfer 47.Nothing contained in section 45 shall apply to the following transfers:- (i) ... . (ii) .... . (iii).any transfer of a capital asset under a gift or will or an irrevocable trust: Provided that this clause shall not apply to transfer under a gift or an irrevocable trust of a capital asset being shares, debentures or warrants allotted by a company directly or indirectly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled the donee, and accepted by or on behalf of the donee. Acceptance when to be made.-Such acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before acceptance, the gift is void. 12.That in view of the above, the order if the ld. AO is bad in law and additions made may please be deleted. 7. Further Ld. counsel for the assessee also stated that the alleged transaction of transfer of immovable property is merely gift and the same is out of the purview of the computation of the capital gain and also provision of section 50C of the Act are not applicable. It was also submitted that the person in whose favour in which the property has been gifted has also been assessed by Ld. DCIT-5(1), Bhopal order dated 20.03.2015 paced at pages 22 to 25 of the paper book. 8. Per contra ld. Departmental Representative (DR) supported the order of both lower authorities. 9. We have heard rival contentions and perused the records placed before us. Through ground no.2 4 assessee has challenged the finding of ld. CIT(A) confirming the addition for Short Term Capital Gain of ₹ 6,63,525/- made by the Ld. AO. 10. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived and genuineness of the relinquishment deed has not been disputed by the authorities below. 13. Now the question arises whether in case of transfer of property by way of gift, the provision of section 50C can be invoked? 14. From perusal of section 47 as reproduced above in the preceding paras, it contemplates that nothing contained in section 45 shall apply to any transfer of capital asset under a gift or in irrecoverable trust. In the instant case addition has been made in the hands of assessee towards Short Term Capital Gain. Mechanism for Computation of income from capital gain is provided in chapter IV, (sub head E) of the Income Tax Act and relevant sections are section 45 to section 55A of the Act. Condition which needs to be fulfilled before commencing to compute a capital gain is that whether there is a transfer of a capital asset. Section 47 provides for the transactions which are not regarded as transfer. If the case of a person does not fall u/s 47 of the Act then only all the remaining provisions of section 45 to 55A come into operation, which also includes substantial provision for full consideration in certain cases i.e. section 50C of the Act. 15. As fa ..... 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