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2011 (5) TMI 625 - AT - Income TaxWhether Section 55A can be invoked when provisions of Section 50C are applicable - LTCG on sale of joint inherited residential property - Revenue contended under-statement of sale consideration - reference to Valuation Officer u/s 55A to determine sale value and FMV at 01.04.1981 - Held that:- In case of immovable property reference to DVO can be made only u/s 50C under sub-section (2) thereon and not u/s 55A which can be invoked in respect of transfer of capital asset as provided under 45(1A), 45(2), or 45(4) where there is no concept of full value consideration. Therefore, reference to DVO for determining FMV as on the date of sale was not valid. Reference to DVO for ascertaining FMV at 01.04.1981 - Held that:- In the present case assessee has submitted a valuation report of the approved valuer who has determined the FMV at Rs. 26,24,269/-. According to the AO fair market value as on 1.4.81 is less and DVO has determined the same at Rs. 15,78,000/- as on 1.4.81. Thus clearly estimate made by registered valuer is not less than the fair market value as adopted by AO on the basis of DVO's report. Under these circumstances, the AO cannot make any reference under clause (a) of section 55A. Also, condition laid down in clause (b)(ii) is not fulfilled since AO has not expressed any opinion about the nature of the asset and other relevant circumstances as to why it is necessary to refer the property to the DVO. Therefore, we do not uphold the reference for determining FMV as on 1.4.81. Encumbrance claim - assessee claimed to have made payment as per terms in the WILL of late Shri Jayantibhai Shah, these payments were made to various persons and were required to be made within 24 months of the death of Shri Jayantibhai Shah - AO disallowed claim only for the reasons that such claim was late and was not made within 24 months of the death - Held that:- Claim cannot be disallowed if it is otherwise legally permissible. Even though WILL required the legal heirs to make the payments on sale of the property within 24 months but in reality sale may take time but for that matter liability created by the charge on the property will not cease to exist - Decided in favor of assessee.
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