Case Law Details
Brief of the Case
ITAT Jaipur held In the case of ITO vs. Tara Chand Jain that the right in land cannot be equated with the land or building. Therefore, it is concluded that section 50C is applicable to transfer of capital asset only in respect of land or building or both and is not applicable to right in land. In the present case, the assessee has only transferred the right in land for a valuable consideration; therefore, the long term capital gain cannot be calculated by invoking the deeming provisions provided under section 50C.
Facts of the Case
The assessee is a pensioner from University of Rajasthan having long term capital gain and interest income. The assessee filed return on 31/07/2008 declaring total income of Rs. 8,46,760/-. The case was scrutinized U/s 143(3) of the Act. The ld Assessing Officer observed that during the assessment order under consideration, the assessee had sold land measuring 11 bighas alongwith three other persons Smt. Shanta Devi Jain, Sh. Naveen Kumar Jain and Sh. Akhilesh Kumar Jain to Shri Mahaveer Swami Grih Nirman Sahkari Samiti Ltd. for total consideration of Rs. 74,91,000/- on 18/04/2007 through an agreement to sale. The assessee had claimed his share at 50% in the property sold and the remaining 50% share belongs to other three persons. Accordingly, the assessee has declared half of the long term capital gains accrued on the above transaction in his hands. The land was not duly registered and no stamp duty was paid on the transaction. Therefore the Assessing Officer referred this property to Sub-Registrar for its valuation as on the date of transfer, for charging stamp duty on the above transaction. The Sub-Registrar valued the property at Rs. 6,97,66,620/- as on 18/04/2007 i.e. the date of transfer, on the basis of DLC rate, for the purpose of charging stamp duty on the above transaction.
The AR of the assessee submitted the detailed objection against proposed computation of capital gain, the argument of the assessee was that the stamp authority valuation is for the purposes of charging stamp duty and applicability of the provisions of Section 50-C. The AO observed that the assessee and purchaser of the land did not present the sale deed before the Sub-Registrar, consciously and knowingly with motive to evade stamp duty on the transfer of the land and tax on capital gain accruing on such transfer as per the provisions of Section 50C. Thus the Assessing Officer taken full value consideration of half property at Rs. 3,48,83,310/- and finally he calculated the long term capital gain at Rs. 3,11,14,986/-.
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