Gayatri Vs ITO (ITAT Agra)
Section 50C Applied but Indexed Cost Harmonised with Co-Owner—Capital Gains to Be Recomputed Using ₹50,000/Bigha as on 1-4-1981
In this appeal, the Assessee—an agriculturist holding 1/11th share in a jointly owned agricultural land—challenged NFAC’s order dated 04.03.2024 confirming long-term capital gains computed u/s 144 r.w.s.147. The land was sold for ₹42 lakhs, while the circle rate was ₹60.20 lakhs. AO invoked section 50C to substitute the sale consideration and, after adopting a purchase cost of ₹10,000 per bigha, computed LTCG of ₹4,79,993 as the Assessee’s 1/11th share. NFAC upheld the assessment.
Before Tribunal, the AR argued that in the case of another co-owner, Shri Peetam Singh, for the same property and same AY, NFAC had already accepted the fair market value as on 1-4-1981 at ₹50,000 per bigha (order dated 29-12-2021). That order had attained finality as Revenue did not appeal. Hence, the Assessee sought uniform adoption of ₹50,000 per bigha.
The Department defended the application of section 50C.
Tribunal upheld the AO’s adoption of circle rate, ₹60.20 lakhs, under section 50C as valid. However, on examining page 3 findings, it held that uniformity must be maintained among co-owners. Since in Peetam Singh’s case the purchase cost was accepted at ₹50,000 per bigha, the same benchmark must apply here as well.
Thus, while section 50C substitution of sale consideration stands, the indexed cost of acquisition must be recomputed using ₹50,000 per bigha, not ₹10,000.
Accordingly, Tribunal directed the AO to recompute LTCG by:
• adopting ₹60.20 lakhs as deemed sale consideration,
• adopting ₹50,000 per bigha as cost as on 1-4-1981, and
• taxing only the Assessee’s 1/11th share.
The appeal was partly allowed.
FULL TEXT OF THE ORDER OF ITAT AGRA
