| The Tax Publishers2020 TaxPub(DT) 1833 (Del-Trib) : (2020) 185 ITD 0224 : (2020) 207 TTJ 1013 : (2020) 080 ITR (Trib) 0464 INCOME TAX ACT, 1961
Section 50C
Where AO doubted genuineness of sale consideration declared in agreement to sale of agricultural land by assessee and invoked section 50C as per registered sale deed, order of AO was invalid because if agreement to sale was not considered genuine then taxability of capital gain would have arisen in subsequent assessment year as per registered sale deed and in case agreement to sale was considered genuine provisions of section 50C were not applicable to case of assessee.
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Capital gains - Applicability of section 50C - Agreement to sale was not considered genuine by AO -
Assessee showed sale of agricultural land at Rs. 4,30,00,000 and after subtracting cost of acquisition, cost of construction and other legal cost, long-term capital gain of Rs. 17,31,266 was declared. In agreement to sale, assessee claimed to sale its 50% share in agriculture land along with remaining 50% owners to a private limited company for a total sum of Rs. 60,00,000. AO alleged that total sale consideration of property exchanged between seller and buyer was recorded at Rs. 1,56,24,200 in sale deed. In said sale deed, assessee was represented by her special power of attorney holder. AO also alleged that as per section 50C amount at which the property was registered for purpose of stamp valuation was to be taxed. Held: If agreement was not considered genuine then sale of property was to be considered as per registered deed, which was executed on 23-6-2010, which fell in assessment year 2011-12 and thus taxing of capital gain on sale of property could not be assessed in year under consideration. If entire registered sale deed was read as a whole, then it was not justified to import part related to sale consideration only as in view of other part, sale of property would be taxable in hands of assessee in subsequent assessment year. Thus, revenue could not take sale value shown in registered sale deed as sale consideration while treating agreement to sale as genuine document. In instant case, if agreement to sale was considered to be genuine, then provisions of section 50C were not applicable and in such circumstances, deemed sale consideration as per stamp valuation authorities could not be invoked in case of assessee.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 48
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