Wife sold shares, bought husband’s Rs 7.5 crore property; taxman send notice
When a woman sold her unlisted shares, she reported long-term capital gains of Rs 8.31 crore. In June 2021, she put Rs 6.91 crore into a residential property on Juhu Tara Road, Mumbai, and claimed exemption under Section 54F.
A woman successfully challenged the Income Tax Department's attempt to disallow her Section 54F exemption on the purchase of her husband’s Rs 7.5 crore property. The woman had earned long-term capital gains of Rs 8.31 crore by selling unlisted shares and used Rs 6.92 crore to purchase a residential property from her husband’s sole proprietorship.
The department argued that the transaction was a tax avoidance scheme, but the ITAT ruled against them. The tribunal found no evidence of a fraudulent arrangement and noted that the business losses claimed by the husband arose months after the property transaction. The court also stated that purchasing a residential property from a spouse does not disqualify a taxpayer from claiming the Section 54F exemption, provided all other conditions are met.
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