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2019 (9) TMI 339 - ITAT AHMEDABADDetermination of capital gain assessable on account of sale of property - in the hands of confirming party exercise u/s.50C(2) has been carried out and the DVO has determined the value of the property - whether full consideration required to be deemed u/s.50C for the purposes of section 48 of the Act cannot exceed this amount? - HELD THAT:- This agreement was executed in respect of the immovable property, a right in persona is created in favour of the transferee/vendee (confirming party). When such right is created in favour of the vendee, the vendor is restrained from selling the said property to someone else because vendee in whose favour right in persona is created has legitimate right to enforce such specific performance of the agreement, if the vendor for some reason is not executing the sale deed. By virtue of agreement to sell, some right is given to the vendee by the vendor. It is encumbrance on the property and on relinquishment of such right confirming parties were getting ₹ 23 lakhs which has also been made subject to tax in their hands. In this situation, we are of the view that the issue needs to be remitted back to the Assessing Officer for determining the fair market value of the property sold by the assessee on the date of sale. He will keep two factors in mind, (a) the fair market value determined by the DVO while considering the case of confirming parties, and (b) encumbrance created on the property by virtue of agreement dated 10/12/2008 in favour of three buyers S/Shri Bhavik B.Trivedi, Milind V. Varavadekar and Smt.Madhuben J. Trivedi. After assessing the effect of these factors, he will determine the fair market value of the property which can be considered as deemed full consideration u/s.50C for the purposes of computing capital gain u/s.48 of the Act. Issue is remitted back to the file of Assessing Officer for fresh adjudication - Appeal of the Assessee is allowed for statistical purposes.
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