Case Law Details
Brief of the Case
ITAT Hyderabad held In the case of Shri Mohd. Imran Baig & others vs. ITO that it is now settled in favour of the assessee by the decisions of the Hon’ble Supreme Court in the case of Sanjeev Lal and Smt. Shantilal Motilal V/s. CIT (365 ITR 389) as well as decisions of the coordinate bench of this Tribunal at Visakhapatnam in the cases of M/s. Lahiri Promoters Visakhapatnam V/s. ACIT and Moole Rami Reddy V/s. ITO (ITA No.311/Vizag/2010 dated 10.12.2010) that the value of property as per stamp duty valuation as per deeming provision u/s 50C as on the date of agreement of sale has to be considered for the purpose of computation of capital gains.
Facts of the Case
The assessees herein are all family members of two brothers, Shri Mohd. Zia Baig and Shri Abdul Arif Baig. The family members of Shri Mohd. Zia Baig and Shri Abdul Arif Baig, owned adjacent immovable properties at Road No.3 Banjara Hills, Hyderabad and the shares of all the assessees in the properties are specified. They sold their properties together for a sale consideration of Rs.3,35,60,000 and Rs.3,54,40,000 both dated 6.3.2006. The sale consideration was shared by the co-owners in the ratio of their land ownership. The assessees computed long term capital gains from the above transaction on the sale consideration received by them and arrived at the long term capital gains in the hands of each of these assessees.
Subsequently, it came to the notice of the Department that the market value of the property in the above transaction was adopted at Rs.4,50,62,000 by the Sub-Registrar office (SRO) for the purposes of payment of stamp duty at the time of registration. Observing that the capital gains should have been computed adopting the deemed consideration of Rs.4,50,62,000 as per the provisions of S.50C , the Assessing Officer held that proportionate deemed consideration has to be brought to tax. Since the assessee failed to adopt the deemed consideration as per the provisions of S.50C, he held that the capital gains was short admitted.
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