TMI Blog2019 (8) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,000/- under Registration No. 2982/2012 and issued a notice u/s 142(1) dated 11.09.2015 and thereafter followed it on 16.11.2015, the assessee filed a revised computation of income working out the capital gains i.e. LTCG at ₹ 13,11,224/- and claimed that provisions of section 50C is not applicable as it was sold to his brother-in-law and brother-in-law s wife. The fact remains that the computation of LTCG filed by the assessee is not voluntary. It has been furnished only after the issue of notice u/s 142(1) dated 11.09.2015 issued by the AO and followed thereafter by order sheet notings dated 16.11.2015. As decided in VIMAL CHAND GHEVARCHAND JAIN ORS. VERSUS RAMAKANT EKNATH JAJOO [ 2009 (3) TMI 997 - SUPREME COURT] Section 50C makes it obligatory on the part of the AO to treat the value adopted by the stamp valuation authority as the deemed sale consideration received or accrued as a result of transfer. - Decided against assessee. - ITA No. 4819/MUM/2017 - - - Dated:- 6-8-2019 - Shri Mahavir Singh (Judicial Member) And Shri N.K. Pradhan (Accountant Member) For the Assessee : Mr. Haridas Bhat, AR For the Revenue : Mr. Chaita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v Garden CHSL, Kandivali West, Mumbai (in short Flat No.804 ) and the same is as under : Sale consideration ₹ 28,00,000 Cost of acquisition ₹ 7,09,440 Indexed cost 852/406 ₹ 14,88,776 Long Term Capital Gain ₹ 13,11,224 The assessee further submitted before the AO that the property was sold to his brother-in-law and brother-in-law s wife and hence at lower than the market rate and the difference in the amount is gift, which is exempt from tax. However, the AO was not convinced with the above explanation of the assessee for the reason that the provisions of section 50C are unambiguous and do not discriminate between the sale to a third party or a relative. Thus the AO held that the assessee was required to adopt stamp valuation of ₹ 41,64,500/- as full value of consideration for computing the capital gains, which he has failed to do. Therefore, the AO recomputed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to hold the transaction as gift even partially is not at all justified from any angle. In a gift, there is no role of any price or consideration. The plea of partial gift and partial sale is just an after-thought and chance taken by the assessee to minimize the tax liability after being caught. As per transfer deed, the entire price of the premises was paid by the transferees. Therefore, nothing is left to be gifted. The tax liability arises because of application of Provisions of Section 50C on transferor. In view of above, the addition of ₹ 26,75,724/- made by the AO as LTCG on sale of flat is hereby sustained. The grounds are rejected. 5. Before us, the Ld. counsel for the assessee submits that appellant has filed his return of income for the impugned assessment year showing income from business, profession and income from other sources and has paid appropriate tax over the same. It is stated that during the assessment proceedings, the assessee himself agreed to the facts that the income under capital gains had not been offered to tax and the assessee also agreed to pay the tax on the capital gains arising thereon. It is stated that the assessee has trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Form No. 35 dated 11.02.2016, his accountant erroneously omitted to record the said entry in his books of accounts and hence the same could not be offered to tax while filing the return of income on 03.01.2014. As per the deed of transfer dated 11.04.2012, the assessee (transferor) sold the above immovable property to Smt. Nilufer Casmiro Lobo Shri Casmiro Leopold Lobo (the transferees) for a sum of ₹ 28,00,000/-. The assessee received from the above transferees a sum of ₹ 3,00,000/- on 27.02.2012 by 2 cheques both dated 27.02.2012 No. 113041 and 113042 drawn in favour of the transferor on the Zoroastrian Bank Ltd. together with the Pay Order of ₹ 25,00,000/- of Zoroastrian Bank Ltd., paid by the said bank on behalf of the transferees aggregating in all to ₹ 28,00,000/- (Ref.: page 16 of the P/B) . The assessee has filed an affidavit dated 12.05.2017 (Ref: page 20 of the P/B) which is reproduced below: AFFIDAVIT I, Shri Bonifacio D'Souza, s/o Bernardo D'Souza, residing at Gaurav Malhar, Gaurav Garden, 96/97 Bunder Pakhadi Road, Kandivali West, Mumbai 400067 having PAN AOUPD5097J, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or hospital or other medical institution or any trust or institution referred to in section 10(23C); or g. from any trust or institution registered under section 12AA. According to the Explanation to section 56(2)(vi), the term 'relative', for the purposes of that section 56(2)(vi), means- i. spouse of the individual; ii. brother or sister of the individual; iii. brother or sister of the spouse of the individual; iv. brother or sister of either of the parents of the individual; v. any lineal ascendant or descendant of the individual; vi. any lineal ascendant or descendant of the spouse of the individual; vii. spouse of the person referred to in clauses (ii) to (vi). We are concerned here with AY 2013-14. 7.2 The assessee in the present case has filed an affidavit dated 12.05.2017 stating therein that he had gifted to his relatives the above property. The assessment in the present case was initiated by the AO on 11.09.2014 by issuance of notice u/s 143(2). The assessment was completed by the AO on 12.01.2016. If indeed it was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under provisions of the Act. 7.5 The contentions of the assessee are that provision of section 50C is not applicable because (i) he has transferred the above immovable property to one of his relative and (ii) the difference between the transaction value and stamp duty value is the gift made by the assessee to the relative. The above contentions are farfetched because the assessee has not filed any gift deed either before the AO or CIT(A) or the ITAT. The attempt to rope in section 56(2)(vi) by the assessee fails because there is no gift deed. All the more, as mentioned earlier, the assessee had not disclosed any capital gains from the sale of the above property. Only after the AO noticed that the assessee had sold an immovable property as per ITS details for ₹ 28,00,000/- under Registration No. 2982/2012 and issued a notice u/s 142(1) dated 11.09.2015 and thereafter followed it on 16.11.2015, the assessee filed a revised computation of income working out the capital gains i.e. LTCG at ₹ 13,11,224/- and claimed that provisions of section 50C is not applicable as it was sold to his brother-in-law and brother-in-law s wife. The fact remains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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