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2013 (10) TMI 1024 - HC - Income TaxApplication of section 50C to determine sale consideration for computation of ‘Capital Gains’ – Held that:- Section 50C(1) is a deeming provision wherein the registration value fixed by the State Government under the Stamp Act is deemed to be considered as the full value consideration. Section 50C(2), however, permits the assessee to contend before the assessing authority that the registration value fixed by the State under the Stamp Act is excessive and does not correspond with the fair market value of the property as on the date of the transfer and that the assessee should not have challenged the levy of stamp duty under the Stamp Act as being excessive and disproportionate to the fair market value of the property before the authorities under the Stamp Act or file any appeal, revision or reference to any court or High Court against such order - In which event the assessing authority would refer the matter to the Valuation Officer to assess the fair market value of the property, keeping in view all the relevant consideration including the registration value fixed by the State. Sub-section (3) provides that if the fair market value fixed by the Valuation Officer is in excess of the registration value, then the registration value should be considered for levy of the capital gains tax. In the instant case, it is to be noticed that the assessee has not availed of the opportunity to question the correctness of the registration value fixed by the State Government. If he had done so, then the assessing authority would have invoked the power of appointing a Valuation Officer for assessing the fair market value. When the registration value is not the disputed question, now, at this stage, it is not permissible for the assessee to contend that the registration value is excessive and disproportionate to the market value of the property, in the absence of contra material, the deemed full value of consideration as stated in section 50C of the Income-tax Act would come into effect. When the capital gain is assessed on notional basis, whatever amount invested in new residential house within the prescribed period, under section 54F of Income-tax Act the entire amount invested, should get the benefit of deduction irrespective of the fact that the funds from other sources are utilized for new residential house. In that context, whatever the total amount actually invested by the assessee for construction of house at Gangavathi should be deducted irrespective of the fact that part of the funds invested are from different sources and not from the capital gains. In that view of the matter, the amount assessable towards net capital gain should be Rs. 10,06,494. Interest to be levied u/s 234A & 234B of the Income tax act – Held that:- The provisions of section 50C of the Income-tax Act was the latest introduced provision. The assessee was not aware of the said provision it is further submitted that the assessee is a resident of Gangavathi the plot at Bangalore was allotted to him as he was a freedom fighter and he was not aware of the actual market value of the property at Bangalore, he was guided by the real estate agent the plot at Bangalore was unproductive not yielding any income ; he was urgently need of money for construction of the house at Gangavathi and therefore the appellant-assessee sold the plot at Bangalore, bona fidely for a sum of Rs. 24,00,000 and there is no attempt on his part to conceal the income to evade tax. The submissions made at the Bar may be good for avoiding penalty but, however, sections 234A and 234B mandates levy of interest at 12 per cent. per annum which the assessee cannot avoid and the court has no jurisdiction to interfere with the same – Decided against the Assessee.
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