- (1.) BY the court : In this reference under s. 256(1) of the Income-tax Act, 1961 (for short "the Act"), the Tribunal has referred the following question for answer BY this Court : "Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified that the assessee-trust was not liable to the charge of capital gains tax in view of the provisions of s. 53 of the IT Act, 1961?"
(2.) RELEVANT asst. yr. is 1986-87, during which the assessee-trust sold residential property for Rs. 1,37,000. The cost of acquisition thereof was Rs. 80,000. The assessee claimed exemption of entire capital gains as per provisions of s. 53 of the Act. The AO, however, denied the exemption. According to him, exemption is available only to the assessee, whose status is `individual' or `HUFs' and not to `AOPs'. In appeal before the Dy. CIT(A), he confirmed the view taken by the AO. In further appeal before the Tribunal, the Tribunal has taken status of beneficiaries, who are having `individual' status and the Tribunal was of the view that when ultimate income goes in the hands of `individual' beneficiaries, they are entitled to benefit of s. 53 of the Act. Heard learned counsel for the parties. Sec. 53 of the Act reads as under : "53. Notwithstanding anything contained in s. 45, where in the case of an assessee being an individual, the capital gain arises from the transfer of a capital asset other than short-term capital asset being buildings or land appurtenant thereto, and being a residential house, the income of which is chargeable under the head "income from house property", the capital gain arising from such transfer shall be dealt with in accordance with the following provisions of this section, that is to say,-- (a) in a case where the full value of the consideration received or accruing as a result of the transfer of such capital asset does not exceed two hundred thousand rupees, the whole of the capital gain shall not be charged under s. 45. (b) in a case where the full value of such consideration exceeds two hundred thousand rupees, so much of the capital gain as bears to the whole of the capital gain the same proportion as the amount of two hundred thousand rupees bears to such consideration shall not be charged under s. 45 : Provided that nothing contained in this section shall apply to a case where the assessee owns on the date of such transfer any other residential house." The provisions of s. 53 of the Act envisage that in a case of capital gain arising from the transfer of a capital asset other than short-term capital asset being buildings or land appurtenant thereto and being a residential house, the income of which is chargeable under the head "income from house property", capital gain arising from such transfer shall be dealt with in accordance with provisions contained in cls. (a) and (b) to s. 53. After cls. (a) and (b) to s. 53, there is a proviso which provides that nothing contained in this section shall apply to a case where the assessee owns on the date of such transfer any other residential house. The golden rule of interpretation is to go by plain language, if there is no ambiguity in the language. After perusing provisions of s. 53 of the Act, we see, no ambiguity in the language of the section. The plain language of provisions of s. 53 of the Act left out no doubt that the benefit is available to the assessee being an "individual", and in case an "individual" sells his residential house and when he has no other residential house, capital gain is exempted on transfer of such house. An assessee under the Act is a "person". A `person' has been defined in s. 2(31) of the Act, which includes an individual, an HUF, a company, a firm, an AOP or a BOI whether incorporated or not, a local authority, and every artificial juridical person, not falling within any of preceding sub- clauses. Thus, all these persons can be assessees independently in their separate status. A perusal of the record shows that the assessee-trust has been assessed in the status of "AOP" and when only the assessee who is an `individual' is exempted from the tax of capital gains on transfer of a residential house, there is no justification to stretch intention of the legislation to extend benefit of exemption under s. 53 to any other assessee than `individual'. Merely because income ultimately goes in the hands of `individual' beneficiaries, is immaterial.
(3.) THE material thing is an `assessment' in case of assessee in hand, which is assessed by the Revenue. Undisputably, in the case in hand, the assessee is a `trust' and the trust has been assessed in the status of "AOP", and the AOPs are not entitled to the benefit of exemption under s. 53 of the Act. THErefore, in our opinion, the Tribunal has committed an error to extend benefit of exemption under s. 53 of the Act to the "AOPs" like the assessee-respondent. In the result, we answer the question in negative, i.e., in favour of Revenue and against the assessee. Accordingly this reference stands disposed of.;