INCOME TAX ACT, 1961

Sections 48 & 50C

Capital gains - Computation - Differential treatment in matter of computation of LTCG - Against the principle of equality under Article 14 of the Constitution

The assessee declared Rs. 1,58,750 as Long Term Capital Gain (LTCG) on sale of his share of inherited ancestral property. The AO, in course of scrutiny proceedings, however, determined the LTCG at Rs. 14,65,063 by invoking section 50C, thereby making addition of Rs. 13,06,313. On appeal, CIT(A) confirmed the assessment order by the AO. Held: During the hearing, the assessee submitted that the AO accepted the computation of LTCG in respect of other co-sharers of the same property, as disclosed in their respective returns. The computation was in the similar line as that of the assessee but differential treatment was meted out to the assessee. On perusal of records, the submission of the assessee was found to be correct. The AO cannot afford to deliver such differential treatment to the assessee as it is against the principle of equality of laws enshrined in Article 14 of the Constitution. In view of this, the addition of Rs. 13,06,313 made by the AO and confirmed by the CIT(A) was ordered to be deleted.

Followed:CIT Vs. Kumararani Smt. Meenakshi Achi. (207) 292 ITR 624 (Mad) : 2007 TaxPub(DT) 0678 (Mad-HC) Chetanbhai Prahaldbhai Gami Vs. ITO (ITA No. 2082/Ahd/2013), dated 19-7-2019 CBDT Circular No. 014(XL-35), dated 11-4-1955

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2009-10

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