ITO Vs Bakthavatsalam Gowtham (Madras High Court)
Registration date irrelevant once Transfer complete under section 2(47)(v) in earlier years : Madras HC deletes Section 50C based tax in subsequent year
AO found that the individual assessee has executed, along with his brother, a sale deed for immovable property on 29.03.2007 relevant to the AY2007-08. The value of the property for registration purpose was shown as Rs.23,50,85,500/-. When this was sought to be assessed, the Assessee claimed that out of the inherited property, 9.75 grounds of land held by him & his brother was given for joint development to CHPL & that a power of attorney was executed in November, 2003. Apart from the joint development, Assessee, along with his brother, had also sold 6.55 grounds of land to CHPL& these were admitted as deemed sale in the AY2004-05. The sale deed executed on 29.03.2007 was only to comply with technical formalities.
AO considered that Sec 50C was applicable & computed the capital gains based on the value adopted for stamp duty. The AO considered Rs.11,75,42,750/- being 50% of the capital gains pertaining to the Assessee (as he was a joint owner along with his brother). After reducing capital gains of Rs.2,45,36,429/- offered to tax in the AY2004-05, the AO assessed balance capital gains of Rs.9,30,06,237/- & added the same to the returned income. Aggrieved, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals)
