| The Tax Publishers2020 TaxPub(DT) 3963 (Del-Trib) INCOME TAX ACT, 1961
Section 50C
Where in view of section 50C, value adopted by State Registration Authority are to be taken as sale consideration and sale value declared by assessee in the sale deed was at Rs. 38,92,000, whereas as per Registered sale deed, the value was Rs. 1.16 Crores, further, difference between value declared by assessee and value assessed by DVO was 4.74% i.e. marginal difference which was less than 10% of difference between value declared and value estimated, since Courts have held that marginal difference needs to be ignored, therefore, AO was directed to adopt the sale value declared by assessee for computing income from LTCG in hands of assessee.
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Capital gains - Computation - AO computed the capital gain by taking the circle rate of sale consideration -
Assessee along with co-owner had sold an immovable property. The cost of acquisition as on 01-04-1981 after indexation was claimed at Rs. 29,41,530. Assessee was having one third share in the property along with co-owner and M/s V. AO during the assessment proceedings noted that the circle rate of the said property was more as compare to sale consideration. Assessee explained that property in question was under dispute for a long time and documents regarding litigation were filed before AO. Assessee claimed that property in question was ancestral and it was mutated in assessee's and his brother's name in revenue record, though the property belongs to three persons. AO on verification of the sale deed noted that property was sold by two owners and concluded that the two were co-owners and M/s. V being 1/3rd co-owner was not accepted. Since valuation report was not received till the date of passing of the assessment order, AO computed the capital gains by taking the circle rate of the sale consideration. Held: In view of section 50C, value adopted by State Registration Authority are to be taken as sale consideration. Sale value declared by assessee in the sale deed was at Rs. 38,92,000, whereas as per Registered sale deed, the value was Rs. 1.16 Crores. AO made reference to the DVO who in-turn had valued both the pieces of land at Rs. 40,86,000. CIT(A) had adopted the said value assessed by DVO and had directed AO to re-compute the income in his hands. Where difference between the value declared by the assessee and value assessed by the DVO was 4.74%, i.e. marginal difference which is less than 10% of difference between value declared and value estimated. Since it was case of estimation of value by the DVO, Courts have held that the marginal difference needs to be ignored. Accordingly, AO was directed to adopt the sale value declared by assessee for computing income from LTCG in the hands of assessee.
Relied:Honest Group Of Hotels (P) Ltd. v. CIT (2000) 177 CTR 232 (J&K) : 2002 TaxPub(DT) 0956 (J&K-HC) Rahul Constructions v. DCIT [ITA No.1547/Pune/2007] : 2010 TaxPub(DT) 1310 (Pune-Trib)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 68
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