INCOME TAX ACT, 1961

Section 50C

Capital gains - Applicability of section 50C - Sale of land to husband - Assessee filed additional evidences substantiating sale being a sham transaction -- Remand

Assessee transferred a land to her husband for a total consideration of Rs. 33,43,000 as per registered sale deed. Further, the consideration of Rs. 5,43,000 was paid by cheque and for remaining amount, a promissory note of Rs. 28,00,000 was executed in favour of the assessee. AO observed that the assessee did not declare long-term capital gains arising from sale of said land and further, the guideline value of such land was Rs. 48,99,520. Thus, the AO by applying provisions of Section 50C computed long-term capital gains on sale of said land at Rs. 47,72,821 and brought to tax the same. Assessee contended that the sale consideration of Rs. 33,43,000 was never received by her in full as only Rs. 5,43,000 was received by her and rest of the money to the tune of Rs. 28,00,000 for which pronote was stated to be issued by her husband, was never received and hence in absence of consideration, the contract was void ab initio. Further, the assessee also contended that she abrogated the purported sale by means of Varthamanam Deed and even the payment of Rs. 5,43,000 was also returned to her husband. Held: Assessee contended that the entire sale transaction of impugned land to her husband was a sham transaction and the objective of the same was to bring on record market value of the said land in order to get compensation from Government against acquisition of her land for setting up integrated bus stand. The evidences in the form of newspaper clippings and judgment by District Collector to the effect that her land was under acquisition by Government were placed on record. Further, the assessee also had brought on record documents such as Vardhamanam Deed, Settlement Deed and affidavit to contend that the entire sale was sham. Further, certain additional evidences were also brought on record by the assessee for the first time before Tribunal. Accordingly, the matter was remitted to AO for de novo assessment after considering all the explanations/evidences filed by the assessee.

REFERRED :

FAVOUR : In assessee's favour (by way of remand)

A.Y. :

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