TMI Blog2016 (9) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/3rd share in the property sold, capital gains to that extent alone should be taxed in her hand. As far as the income of the minors are concerned, if the capital gains if any arises in their hand, that has to be determined first separately and then only the same can be ‘clubbed’ in the hands of the mother. The AO has not considered this aspect at all and entire sale consideration is brought to tax in the hands of assessee alone. He should have determined the share of each person separately, determine the capital gains in each hand and then only provisions of Section 64 & 65 can be invoked. Since AO’s computation is per se not according to the provisions of the Act, that also requires re-consideration. Capital gains computation on sale of shares - AO is directed to examine the issue again as assessee has given various dates for acquisition of shares. Even though shares could have been allotted later, whether assessee can get benefit of cost of indexation having invested the money much earlier in the company which is their private limited company. Since, these aspects requires re-examination, we hereby set aside the computation of Long Term Capital Gain and Short Term Capital Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting of big well used for agricultural purposes and area is within full tank level of the tank. Consequently, she also filed objections contesting that the market value is less. AO, in view of the submissions disputing the market value of the property, referred the issue to Valuation Officer of the department requesting to inspect the property and determine the true and correct value of the property as per Section 50C of the Act. Reference was made on 21-03-2013 and the Valuation Officer vide letter dt. 26-03-2013 has determined the value of property at ₹ 79,20,000/-, as on July 2009. The AO adopted the value as determined by the Valuation Officer and after giving credit to the cost of acquisition as claimed, determined the Long Term Capital Gain at ₹ 69,01,731/- and brought to tax the above amount. In addition to that, assessee claimed loss of ₹ 18,17,147/- on sale of shares of M/s. Chinimilli Drugs Pvt. Ltd., belonging to her and her husband. In computation of income, she admitted sale price of ₹ 1,52,03,220/- and purchase cost also ₹ 1,52,03,220/-. The indexation cost was arrived at ₹ 1,70,20,367/- and loss of ₹ 18,17,147/- was claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicate the issue. Assessee is aggrieved and raised the grounds on the above two issues. In the course of present hearing, assessee filed a Paper Book containing Pgs. 1 to 45 and authorisation in the name of Shri Amrit Kumar Kota. However, AR has not appeared when the case was posted number of times but filed written submissions as under: 1. The assessee Chinamalli Venkata Ramana Kumari is an Individual filed her income tax returns for the A.Y 2010-11 on 15.07.2010. 2. There are two grounds of Appeal. (a) Sale of shares (b) Sale of Property 3. During the assessment year the assessee sold 20,55,000 shares. 4. The assessee has transferred the property situated at Survey Nos. 11,12 (part) and 15 admeasuring 1200 sq. yards situated at Ramannaguda Village, Serilingampally Mandal, R.R District along with her minor daughter Kumari CH. Jaahnavi and Master CH. Vijaya Seshagiri as legal heirs of C Kasi Visweswara Vara Prasad, husband of the assessee. 5. The said property was originally agreed to give as a gift to Smt. E. Bramara as gratitude for the helps and support to the assessee. 6. Unfortunately, the assessee's husband C Kasi Visweswara Vara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusing the documents on record, we are of the opinion that the assessment requires to be re-done, as the AO has not done the assessment properly. First of all, the AO has referred the valuation to the Valuation Officer and adopted the value of ₹ 79,20,000/- which is indeed very much less than the market value for stamp duty purposes but more than what assessee has received. AO has to give a fair opportunity to assessee with reference to the Valuation Officer s report and obtain objections if any from assessee, before determining the value when assessee admits that the property was sold for ₹ 20 Lakhs on certain special considerations. Since no opportunity was given to assessee before adopting the value, we are of the opinion that assessee should be given due opportunity by following the principles of natural justice. On that reason alone adoption of the sale value cannot be approved. 7. The next issue to be examined is how the AO could bring the entire amount to tax in the hands of assessee? As seen from the sale deed placed in the Paper Book at Pg. 4, Smt. Ch.V. Ramani and her children has inherited the property after the sudden demise of her husband and she ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and complete the assessment as per the provisions of the Act, we hereby set aside the order of AO and CIT(A) on this issue. 9. With reference to capital gains computation on sale of shares, the AO is directed to examine the issue again as assessee has given various dates for acquisition of shares. Even though shares could have been allotted later, whether assessee can get benefit of cost of indexation having invested the money much earlier in the company which is their private limited company. Since, these aspects requires re-examination, we hereby set aside the computation of Long Term Capital Gain and Short Term Capital Gain on sale of shares for re-examination. The sale deeds indicate that the shares were sold piece-meal during the year under consideration. Whether only one person has purchased or different persons have purchased the shares also require examination in view of the special circumstances in which assessee was divested of the shares as well as landed property after the death of her husband. With these observations, the entire assessment is restored to the file of AO by setting aside the orders of AO and CIT(A). Grounds are allowed for statistical purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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