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2019 (3) TMI 1455 - AT - Income TaxComputation of LTCG - Addition U/s 50C - determination of price at which capital asset sold - Transfer of clear and marketable title - assessee is a Private Family Discretionary Trust settled by Sir Mohammed Yusuf in 1929 - assessee-trust was in possession of certain right in the land which was in the name of assessee, however, the assessee was not in possession - assessee trust issued a public notice for inviting bids for sale of their rights in the said properties on the basis of “as is where is” vide public notice published - bid of M/s Essa Associates was accepted being highest bidder - Fair Market Value of the right was ascertained by the assessee on the basis of highest bidder of the participants received by assessee, which was duly approved by Hon’ble Bombay High Court accepted and granted the approval - HELD THAT:- There is no doubt from the Public notice issued by the assessee for sale of the piece of the land and from MOI that other documentary evidence produced by the assessee that the was sufficient to indicate that the property was under various encumbrances and the assessee could not be said to be the absolute marketable title of the said property. At the same time, it is also true that the said documentary evidence read with the MOI entered into by the assessee with M/s. Essa Associate that the assessee was still holding certain rights in the property and the same constituting capital asset. Moreover, the MOI was duly approved by Hon’ble Bombay High Court in its order dated 01.10.2004. The value adopted for the purpose of payment of stamp duty is not disputed by the assessee. The assessing officer has not brought on record that the property under sale was not was under various encumbrances and the assessee was having the absolute marketable title of the said property. No material is brought on record by assessing officer that the assessee has received much more consideration than shown in the MOI. AO treated the stamp valuation rate as the value of consideration, dispite the facts that the assessee throughout the proceedings contended that the assessee was neither having possessing of the impugned piece of land nor having marketable title. The assessee offered the said piece of land on the basis ‘as is where is’. These vital facts were ignored by the lower authorities. As relying on KP VARGHESE [1981 (9) TMI 1 - SUPREME COURT] and KHOOBSURAT RESORTS PVT. LTD. [2012 (11) TMI 590 - DELHI HIGH COURT] when the land under sale was having encumbrances the adoption of stamp valuation as a sale consideration by applying the provisions of section 50C was not justified by assessing officer, in absence of any evidence that the sale consideration was more than the value shown in the MOI. Therefore, we direct the assessing officer to work out the capital gain on the basis of consideration shown by the assessee. Addition under the head ‘income from other sources’ - amounts distributed in the hands of beneficiary have been taxed at the hand of assessee, though it has been offered to tax in their individual return - HELD THAT:- CIT(A) has recorded that the assessee failed to established the shares of the various beneficiary on the basis of trust deed and their return of income to substantiate that the sums received from the assessee have been offered to tax by those individual. Considering the contention of both the parties this issue is restored to the file of assessing officer to verify the fact and grant relief to the assessee in accordance with law. Needless to direct that the assessing officer shall grant opportunity to the assessee for filing relevant documentary evidences to substantiate its contention - thus ground of appeal is allowed for statistical purpose.
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