Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (7) TMI 623 - AT - Income TaxCapital gain computation - Applicability of section 50C - HELD THAT:- Provisions of section 50C was introduced to curb the menace of unaccounted cash being infused in the real estate transactions. Quite often the actual sale consideration paid for acquiring immovable property is more than the sale consideration disclosed in the sale deed executed. In order to overcome the escapement of Capital Gain Tax on such transactions, Section 50C was introduced in the Statute, so as to at least adopt the market value of the State Revenue Authority as the sale consideration for the purpose of computing Capital Gain under the provisions of the Act. To avoid genuine hardships to the assessee, the provisions of Section 50C(2) provided for referring the matter to the Valuation officer of the Revenue to determine the actual market value of the immovable property sold by considering all the relevant factors which may not have been considered by the State Valuation Authority. In the case of the assessee, the value of the property is already determined by the State Government which is nothing but the amount of ₹ 46,22,878/- coupled with certain TDS rights. No compensation is paid by way of cash for acquisition of the land in the case of both the assessee. It is apparent that the assessee have not actually transferred their immovable property consisting of land and building but have only transferred their right to receive the amount of the compensation and the TDR rights and both these asset do not fall under the category of immovable property. There is no finding by the Ld. Revenue Authorities that the market value of the TDR rights received by the assessees coupled with the amount is at par with the SRO value of the property. It is also evident that the transaction is a distress transaction causing mental agony due to loss arising out of land acquisition and wastage of land. Provisions of section 50C of the Act cannot be invoked in the hands of both these assessee. Hence set aside the order of the CIT (A) and direct the Ld. AO to delete the addition made invoking the provisions of section 50C of the Act in the case of both the assessee. Appeals of the assessee are allowed.
|