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Smt. Shyama Prakash Agarwal Versus ITO, Ward-2 (2) Surat.

Addition u/s 50C - Computation of capital gain - difference in sale price in sale deed and valuation by the stamp valuation authorities - Held that:- No doubt section 50C contemplates replacement of full value of consideration received as a result of such transfer. But a transfer of capital asset should be either land or building. It does not authorize the AO to replace the full value of the consideration in each and every case, where capital gain is to be computed. This deeming fiction is appli .....

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BER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Assessee : Shri Mehul R. Shah For The Revenue : Shri V.K. Singh, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: The assessee is in appeal before us against the order of the ld.CIT(A)-II, Surat dated 26.6.2012 passed for the Asstt.Year 2008-09. 2. Solitary grievance of the assessee is that the ld.CIT(A) has erred in confirming the addition of ₹ 12,92,568/-. 3. Brief facts of the case are that the assessee has filed her return of income on .....

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n 13.3.2008. In the sale deed the sale price of the land was shown at ₹ 15 lakhs, whereas the said property was valued by the stamp valuation authorities for the purpose of stamp duty payment of ₹ 27,92,568/-. The ld.AO has confronted the assessee as to why the difference of ₹ 12,92,568/-should not be adopted as per section 50C of the Income Tax Act for computing the capital gain. In response to the query of the AO, it was contended by the assessee that since the land in disput .....

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asset, being land or building or both, is less than the value adopted by the assessee by an authority of a state government for the purpose of payment of stamp duty, in respect of such transfer, the value so adopted or assessed, shall, for the purpose of section 48, to be deemed to the full value of considerations received or accruing as a result of such transfer. According to the assessee, the rights accrued to her, by virtue of purchase agreement, were capital in nature but not akin to a capi .....

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5. With the assistance of the ld. representatives, we have gone through the record carefully. 6. The ld.counsel for the assessee made reference to the following decisions in order to bring his point at home that capital assets can be of different kinds. The section 50C is not applicable on every kind of capital asset. i) DCIT Vs. Tejinder Singh, 19 taxmann.com 4 (Kol Trib) ii) Atul G. Puranik Vs. ITO, 132 ITD 499 (Mum Trib) iii) Smt. Kishori Sharad Gaitonde Vs. ITO, ITA No.1561/Mum/09 (Mum Trib) .....

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0 sq.yards out of a larger plot and price fixed was at the rate of ₹ 175 per sq.yard. The purchase was to be completed within six months from the date of the agreement and after expiration of the said period of six months by a 15 days notice to be given in writing. The time could be made the essence of the contract. The agreement was executed on July 31, 1961. It was the responsibility of vendor to obtain necessary permission from the municipal and other authorities, for the subdivision of .....

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sign the assessee s right, title and interest under the agreement entered into with Anandji Haridas for purchase of this property and ₹ 90,000/- being the amount of money deposited with M/s.Kanga and Co., which was received as return of the advance money. The dispute arose whether the sum of ₹ 5,00,000/- received by the assessee represents the money received on transfer of a capital asset and required to be assessed under the head capital gains . The Hon ble Bombay High Court has mad .....

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90,000, the position on that day was not only that the original agreement of said between the assessee and Anandji Haridas was to be treated as subsisting but also that the tripartite agreement between the assessee, Anandji Haridas and M/s. Advani and Batra that the money paid by the assessee to Anandji Haridas was to be returned by M/s. Advani and Batra and an additional sum of ₹ 5,00,000 was also to be paid to the assessee by M/s. Advani and Batra was given effect to. Under this triparti .....

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damages for breach of the agreement of sale. The position on September 23, 1963, when the receipt (annex. "H") was executed by the assessee was that ₹ 5,90,000 were received by the assessee as consideration for assigning its rights under the agreement with Anandji Haridas in favour of M/s. Advani and Batra. These rights, which had been assigned in favour of M/s. Advani and Batra, clearly fell within the wide definition of capital asset in clause (14) of s. 2 of the I.T. Act, 196 .....

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e assessee paid to the vendor, as required by the said agreement for sale, a sum of ₹ 17,500 as earnest money. The assessee was persuaded to file suit for specific performance of the said agreement for sale or, in the alternative, for damages for its breach. The dispute was settled and a sum of ₹ 1,17,500/- was paid to the assessee. This sum was received by the assessee in accounting year relevant to the asstt.year 1972-73. The ITO held that the assessee has acquired under the said a .....

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or purchase of property. On extinguishment of such rights, gain arisen to the assessee is to be assessed as a capital gain. The Hon ble Court has upheld the conclusion of the AO that the assessee had earned capital gain of ₹ 82,086/-. 9. The next decision on this issue is of Hon ble Madhya Pradesh High Court in the case of CIT Vs. Smt. Laxmidevi Ratani, 17 TAXMAN 642 (MP). In this case, Smt. Laxmidevi Ratani and one Shri Murlidhar Totla were partners of one firm M/s.Indian Pharmaceuticals. .....

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on ble High Court. The vendee received a sum of ₹ 14,85,000/-. This amount was received in the accounting year relevant to the Asstt.Year 1987- 88. The AO has treated the receipt of ₹ 14,85,001/- to be in the nature of capital gains in the hands of the assessee, and accordingly taxed it. 10. No doubt section 50C contemplates replacement of full value of consideration received as a result of such transfer. But a transfer of capital asset should be either land or building. It does not .....

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