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2019 (7) TMI 594 - AT - Income TaxAddition u/s 50C - substitution of stamp duty value as deemed sale consideration against actual sale price - reduction of payment made to trespasser - sale deed/document registered before the sub registrar without disputing the stamp duty for valuation of the land - HELD THAT:- It is primarily the case of the assessee that the lower consideration received on sale of property is attributable to the encumbrances, encroachment and defect in vacant possession of the property. The assessee has demonstrated the encroachment by illegal occupiers with reference to electricity bills in the name of the illegal occupiers and substantial payment of ₹ 1,75,00,000/- in aggregate to various such occupiers by the purchaser in the subsequent years. This fact of payment towards encroachment has not been disputed by the Revenue. Therefore, there is no reason to exclude such amount for the purposes of computation of capital gains. Thus, the purchase consideration together with costs towards obtaining vacant property should stand at ₹ 2,26,00,000/-. The assessee however has failed to explain as to why the difference between deemed sale consideration of ₹ 2,60,05,348/- adjusted purchase costs and ₹ 2,26,00,000/- being ₹ 34,05,348/- should not be subjected to capital gain tax in the light of Section 50C. The brokerage costs incurred on sale consideration by the purchaser cannot be taken into account for the purposes of Section 50C. CIT(A) has thus failed to take cognizance of applicability of Section 50C to the extent of ₹ 34,05,348/-. Hence, the order of the CIT(A) requires to be modified to the aforesaid extent and the chargeable capital gain requires to be increased by ₹ 34,05,348/-.- Appeal of the Revenue is partly allowed.
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