Mahesh Shrivastava Vs ITO (ITAT Raipur)
The appeal concerned additions made to the assessee’s income on account of long-term capital gains arising from the sale of jointly owned land and the consequent denial of full exemption under Section 54F of the Income-tax Act, 1961. The assessee challenged the adoption of an inflated stamp duty valuation under Section 50C and the partial denial of exemption under Section 54F.
The assessee had filed the original return declaring income of ₹95,000. The case was later reopened on the ground that capital gains chargeable under Section 50C on transfer of land had escaped assessment. The assessee, along with parents and siblings, sold land at Labhandi, Raipur, measuring 16.71 acres, for a total consideration of ₹1,30,50,000, with the assessee’s one-sixth share being ₹21,75,000. At registration, the Sub-Registrar adopted a much higher value of ₹5,75,11,000 for stamp duty purposes. Relying on this, the Assessing Officer recomputed capital gains by adopting the higher stamp value under Section 50C, resulting in an addition of about ₹74.5 lakh in the assessee’s hands. While doing so, the Assessing Officer allowed only partial exemption under Section 54F on the basis of the deemed consideration.
The Commissioner (Appeals) upheld the assessment, holding that Section 50C had been correctly invoked, that the stamp valuation authority was competent, and that exemption under Section 54F had to be computed on capital gains determined after applying Section 50C. The Commissioner also noted that the assessee had not invoked Section 50C(2) or challenged the stamp valuation at the assessment stage.
