Archive · 18 Jul 2025
Mumbai Court Grants Tax Exemption for Flat Purchased From Husband
Imagine someone sells a house and uses the money to buy another one.
They usually don't have to pay taxes on the profit if they follow the rules.
Kavita did this, selling a flat and buying a new one from her husband.
The taxman said it wasn't a real purchase, but a court disagreed.
The court said because she owned the first flat and paid for the new one properly, it was a valid move.
This means even if family members buy and sell property to each other, they can still avoid certain taxes if they follow all the rules.
Mumbai ITAT allowed Kavita Damani capital gains tax exemption.
Damani sold a property and reinvested the profits in a flat purchased from her husband.
The assessing officer initially denied the exemption, viewing the transaction as not genuine.
ITAT ruled in favor of Damani, citing her sole ownership and genuine payment trail.
The court clarified that Section 54 exemption applies even in transactions between relatives.
- Who
- Kavita Damani and her husband
- What
- Mumbai ITAT allowed a woman's capital gains tax exemption.
- When
- January 2020 (sale of flats) and March 2021 (purchase of a flat).
- Where
- Mumbai, India
- Why
- ITAT overturned the assessing officer's decision, allowing tax exemption on the purchase of a flat from her husband.
Assessing Officer's Perspective
ITAT's Ruling
Transaction Validity
Assessing Officer's Perspective
Transaction not genuine; primarily to transfer capital gains.
ITAT's Ruling
Genuine purchase based on ownership and payment trail.
- Tax Section
- Section 54 of the Income Tax Act
- Original Property Sale
- ₹5.98 crore
- Capital Gains
- ₹4.21 crore
- New Flat Purchase
- ₹3.85 crore
- Exemption Claimed
- ₹3.96 crore
- Court
- Mumbai Income Tax Appellate Tribunal (ITAT)