Case Law Details
Ashokbhai Chinubhai Bharwad Vs ITO (ITAT Ahmedabad)
The assessee has shown his share of sale consideration at Rs.81.00 lakhs being 25% share. The AO further found that sub-Registrar, Ahmedabad City Taluka had valued the property for the purpose of stamp duty payment at Rs.5,24,83,000/- as against sale consideration shown by the assessee at Rs.3,24,00,000/-. Therefore, the AO issued a show cause notice inviting explanation of the assessee as to why sale value for the purpose of computation of capital gain should not be taken at Rs.5,24,83,000/- i.e. value adopted by the sub-Registrar for payment of stamp duty In response to the query of the AO, it was contended by the assessee that he has entered into an agreement to sell on 30.10.2010. A part payment equivalent to 10% of total sale consideration was received at Rs.32,40,000/- by the vendor, and therefore the value for the purpose of section 50C is ought to be seen on the date of agreement which were supported by the receipt of part sale consideration through account payee cheque.
The ld.AO did not accept this contention of the ld.counsel for the assessee. He observed that the sale deed was executed on 31.3.2012, and therefore, jantri value (circle rate) for the purpose of stamp duty adopted by the Sub-Registrar on the date of sale i.e. 31.3.2012 is to be adopted for calculating deemed sale consideration. He accordingly adopted the sale consideration at Rs.5,24,83,000/-, and accordingly determined long term capital gain. The sale consideration for the purpose of calculating long term capital gain was taken at Rs.1,31,20,750/- in the hands of the assessee against Rs.81,00,000/- being 25% shown by the assessee. In this way, an addition of Rs.50,20,750/- has been made in the hands of the assessee. Appeal to the CIT(A) did not bring any relief to the assessee.
Held by ITAT
if we examine the facts of the present case, then it would reveal that an agreement enforceable in law was executed by the assessee on 30.12.2010. For the purpose of demonstrating authenticity of this agreement, corroborative evidence in the shape of receipt of part payment through banking channel has been furnished. In other words, the assessee has received part payment of the sale consideration at the time of sale agreement, and those payments have also been recognized in the final sale deed. Therefore, we do not have hesitation in concluding that agreement executed on 30.12.2010 has been given effect by the parties which resulted in execution of the sale deed roughly after one and half years. Circle rate at the time of execution of agreement was lesser than one adopted by the parties as sale consideration. Therefore, the facts in the case of Rahul G. Patel (supra) are fully applicable on the facts of the present case, and full sale consideration for the purpose of computing long term capital gain in the hands of the assessee is to be adopted at Rs.81 lakhs being 25% of share of Rs.3,24,00,000/-.
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