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2009 (12) TMI 48 - HC - Income TaxApplicability of provisions of section 50C on a business asset – income from sale of property held as business asset – valuation for the purpose of stamp duty - The assessee company filed its return of income for the assessment year 2004-2005 on 1.11.2004 admitting an income of Rs.78,23,894/- and claimed set off of the entire income against the earlier years' losses and claimed capital loss of Rs.83,64,350/-. While completing the assessment, the Assessing Officer noticed that the assessee claimed a capital loss on the sale of the property at Greams Road. The consideration shown was for Rs.5 Crores - As the assessee was engaged in the business of property development, the activities of the assessee were treated as business. Therefore, while computing the income, the question of indexation cost was not considered and the cost of the land was taken as Rs.3,19,49,496/-. In the balance sheet, the value of the property has been shown as Rs.2,55,87,815/- under current assets. The Assessing Officer held that though the apparent sale consideration was for Rs.5 Crores, the sale price should be taken at the amount as fixed by the Registering Authority on the basis of the guideline value of Rs.6,94,45,920/-. – held that - The invocation of Section 50C of the Act as can be seen from the provisions of the Act can be made in order to find out the true value of the capital asset. In the very facts and circumstances of the case, the property in the hands of the assessee was treated as business asset and not as capital asset, there is no question of invoking the provisions of Section 50C of the Act, which is, as already stated, pertaining to determining the full value of the capital asset. – decided in favor of assessee
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