Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Income Tax Officer, Ward 5 (1) , Jaipur Versus Liyaqat Ali

Addition on account of capital gains - estimation of fair market value - application of fair market value on the basis of DLC as per Section 50C - Held that:- It is undisputed fact that these properties were not got registered under the Registration of Stamp Act. It is also a fact that there was a transfer of assets from assessee to brother of the assessee namely Shri Shoukat Ali. The assessee himself admitted that this transfer as on 01/4/2006. The Assessing Officer has given deduction @ 10% on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

31/3/2007. Therefore, the capital gain calculated by the Assessing Officer on their property i.e. office premises is justified. However, the objection raised by the AR against the valuation of the DVO is required to be considered, therefore, we feel necessary to allow further deduction @ 10%, in total 20% including Assessing Officer’s deduction from the fair market value estimated by the DVO. It is further noticed by the Bench that when book value as on 01/4/2006 has been taken for computing of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld CIT(A)-III, Jaipur for A.Y. 2007-08. The sole ground of the appeal is against deleting the addition of ₹ 39,38,796/- made by the Assessing Officer on account of capital gains. 2. The assessee is engaged in the business of trading of gem stones. He filed his return on 31/8/2007 declaring total income of ₹ 3,54,110/-. The case was scrutinized U/s 143(3) read with Section 147 of the Income Tax Act, 1961 (in short the Act). The ld Assessing Officer observed that the assessee had tran .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 1,98,130/- It was further observed that in the balance sheet as on 31/3/2006 Shri Shoukat Ali had been shown a creditor for ₹ 64,30,294/- but as on 31/3/2007, no amount in his name had been shown in liability side. Thus, it has been held that 50% share in the above asset was transferred to him and the value of these assets are adjusted in his account against the amount payable to him. The ld Assessing Officer gave reasonable opportunity of being heard on this issue. After consider .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and liabilities were taken over by Shri Liyaqat Ali (assessee). Second party of the deed as per book value is ascertained on 31/3/2005. In para 7 of the deed, it was mentioned that the balance amount of the capital account as stand on 31/3/2005 of the retiring partner of the deed will be paid by Shri Liyaqat Ali, second party of the deed as and when conveniently available to him. The books of account of the firm as on 31/3/2005 were finalized wherein the immovable property assets were shown as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cuted on the same date and that dissolution deed was executed completely as such the immovable assets of the firm had been transferred from the firm to partner Shri Liyaqat Ali on 31/3/2005 and hence Shri Liyaqat Ali (assessee) was having all the rights and liabilities for these assets w.e.f. 31/3/2005. It is also clear from the balance sheet of the proprietory concern as on 31/3/2006. The ld Assessing Officer finally considered the definition of transfer U/s 2(47) of the Act and applied Section .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld as under:- 1. As per provisions of section 48, the income chargeable under the head "capital gains" shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the amount of cost of acquisition, cost of any improvement and the expenditure incurred wholly and exclusively in question with such, transfer. As per section 50C, where the consideration received or accrued as a result of transfer of the capit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

As such the higher of the book value or the value assessable by the Sub-registrar has to be adopted to compute capital gains in terms of the provisions of section 48 of the I.T. Act. 3. As regards objection of Id. A/R that the word "assessable" was introduced in section 50C w.e.f. 1.10,2009 and hence the same cannot be adopted for A.Y. 2007-08, it is pertinent to mention that this amendment was brought only to clarify the position regarding the transactions which are not registered wit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stamp authority. As such the amendment brought out by the Finance Act 2009 in section 50C is clarificatory in nature. It is well settled legal position in view of Supreme Court and High Court decisions that the clarificatory amendments are retrospective in nature. 4. Since section 50C was inserted w.e.f. 1.4.2003, the word "assessable" is also deemed to have been inserted from its inception . In view of such legal position, the value 'assessable' by the Stamp Valuation authorit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as on 01.04.2006. 6. The objection raised by Id. A/R regarding valuation made by the DVO of the office premises are not acceptable. The valuation was referred to DVO u/s 55A of the I.T. Act. In section 55A, it has been provided that where any such reference is made, the provisions of sub-section (2), (3), (4), (5) and (6) of section 16A shall also apply. Sub-section (6) of section 16A is reproduced as under: "On receipts of the order under sub-section (3) or subsection (5) from the valuatio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce rejected. Finally he calculated short term capital gain on plot No. 33, 33A, Jagdish Colony, Amer Road, Jaipur at ₹ 4,17,709/- and on agricultural land of Amer at ₹ 13,12,411/- and on office premises at ₹ 22,08,676/-. The total capital gain was calculated at ₹ 39,38,796/- by the Assessing Officer. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the assessee s appeal by observing as under:- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Appellant submitted that 50C is not applicable in his case since properties were not registered and there was no assessment of stamp duty valuation. Appellant submitted several decisions including decision of jurisdictional tribunal in which it is held that unless properties are registered, section 50 C is not applicable. Assessing officer mentioned that amendment to section 50C also considers assessable value of properties. Although assessing officer treated the same as the retrospective in o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he amendment to section 50C is not applicable. Properties are not registered and therefore assessable value by stamp duty authorities cannot be taken as full value of consideration. Accordingly capital gain worked out by the assessing officer cannot be sustained. The addition made by the AO is therefore deleted. 4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer and further argued that the ld Assessing Officer had applied fair market .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ad, Jaipur had been referred to DVO who has estimated the fair market value U/s 55A of the Act. The assessee has objected the fair market value on the ground that the date of transfer was 01/4/2006, accordingly, the Assessing Officer has also given 10% deduction out of fair market value, therefore, the order of the Assessing Officer may please be confirmed. 5. At the outset, the ld AR of the assessee has reiterated the arguments made before the ld CIT(A) and further argued that in Section 50C of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on the record and also gone through the order of the ld CIT(A). The ld CIT(A) had simply decided the case on the basis of amendment made in provisions of Section 50C with regard to assessability. It is fact that various Tribunals have held that amendment made in Section 50C for assessable is effective from 01/10/2009 but the ld Assessing Officer has used DLC rate to decide the fair market value on the date of transfer. It is undisputed fact also that these properties were not got registered unde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version