INCOME TAX ACT, 1961

Section 50C

Capital gains - Property sold via Sale Agreement-cum-GPA - Date of transfer of asset -

The assessee along with his wife has sold the property on 23-7-2004 for a sale consideration of Rs. 23,41,000, in which he received Rs. 23,21,000 and the remaining balance amount of Rs. 20,000 has to be received later. According to the AO, the same property was sold subsequently on 28-5-2012. The stamp duty value as on the date of subsequent sale i.e. on 28-5-2012 was Rs. 78,97,000, therefore as per section 50C capital gains has to be calculated from the date of subsequent sale made by the purchaser on the ground that assessee has not received full consideration i.e. he only received Rs. 23,21,000 and Rs. 20,000 was not received and possession was also not given to the GPA holder and therefore it has to be taxed in the hands of the assessee on subsequent sale i.e. on 28-5-2012. Held: In the present case, assessee had received full consideration on 26-7-2004, therefore it can be concluded that the property has been transferred to Sri Paturi Krishna Babu on 26-7-2004. From 27-7-2004 onwards the entire land was in the possession and ownership of purchaser therefore the capital gains as per section 50C as on the date of sale i.e. 28-5-2012 has to be taxed in the hands of purchaser. So far as assessees is concerned, the capital gains has to be taxed in the hands of the assessee by considering the transfer has taken place on 26-7-2004 as per section 50C of the Act.

REFERRED :

FAVOUR : Partly in assessee's favour.

A.Y. : 2013-14

SUBSCRIBE FOR FULL CONTENT