Shivprakash Ramcharan Sharma Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has remanded the case of Shivprakash Ramcharan Sharma vs. ITO back to the Commissioner of Income-tax (Appeals) for reconsideration. The decision centers on the need for a thorough verification of the sale consideration of a property and its stamp duty value, which resulted in a significant tax addition.
The taxpayer, an individual, had filed his income tax return for the Assessment Year 2012-13. The Assessing Officer (AO) received information that the taxpayer had sold an immovable property on September 15, 2011, for ₹30,09,925. However, the Jantri value (stamp duty value) of the property was recorded as ₹41,20,925. This discrepancy led the AO to believe that Section 50C of the Income Tax Act was applicable, which allows the AO to deem the stamp duty value as the full value of the sale consideration if it exceeds the declared sale price.
Based on this information, the AO reopened the case under Section 147 and issued a notice to the taxpayer. However, the taxpayer failed to respond to the notices, leading the AO to pass an ex parte order under Section 144 of the Act. The AO then made two additions to the taxpayer’s income: ₹30,09,925 for capital gains not offered for tax and ₹11,11,000 for the difference between the sale consideration and the stamp duty value under Section 50C. The total tax effect of these additions was ₹12,35,977.
