section 50C

‘Undervalued’ vs ‘Understated’ Capital Asset- Fiction of Fair Value

Income Tax - It is a well settled and in substance a legal precedent that what is subject to tax is a real income. The principle of real income has been subject matter of intrinsic litigation in past and the possibility of probable dispute on the scope of what constitutes real income in days to come cannot be completely ruled out despite there have be...

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Certain instances of tax planning in case of sale of house property

Income Tax - The last 4-5 years have not been the best period for the real estate industry in India. Many real estate companies have become bankrupt and many still continue to be under great financial stress due to stalled projects. Even a normal home buyer is not in a profitable position due to declining property rates. The […]...

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Time to Revisit Section 50C/43CA/56(2) – Adoption of Circle Rates

Income Tax - Time to Revisit Section 50C/43CA/56(2) of Income Tax Act concerning Adoption of Circle Rates for Computation of Capital Gain/Business Profits/Income from Other Sources on Land & Building!! The Finance Act 2002 has introduced a new section 50C with effect from 1-4-2003, for the purpose of computation of capital gains in real estate tra...

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Pre-Budget Memorandum 2019- A Small Wish List From New Finance Minister

Income Tax - Union Budget 2019 – New Finance Minister Smt. Nirmala Sitharaman’s first budget after the huge and unprecedented electoral win of Sh. Narendra Modi Government has the backing of a mammoth public mandate and as such is expected to be a reform oriented budget and not a populist one. However, along with the bold and reform […]...

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Deeming Fiction for Real Estate: Is It beyond Reality?

Income Tax - One of the most controversial provisions, which had a huge impact on the taxation of Real Estate Transactions, was the introduction of concept of Deeming Fiction through Section 50C....

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6 Suggestions for Amendments in Income Tax Act by BCAS

Income Tax - Bombay Chartered Accountants' Society has made a Representation on 'Suggestions for Amendments in the Income Tax Act', on 24th May, 2019, to the Joint Secretary TPL, Central Board of Direct Taxes, Ministry of Finance, Government of India....

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Section 50C: Option for adopting stamp duty value on date of agreement- ICAI Suggestion

Income Tax - In relation to computing capital gains tax liability on transfer of land or building, amendment made via the Finance Act, 2016 gives an option for considering the stamp duty value as on date of agreement instead of stamp duty value on date of registration...

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Provide relief when agreement date fixing sale consideration & Registration Date not same

Income Tax - Rationalisation Of Section 50c To Provide Relief Where Sale Consideration Fixed Under Agreement To Sell- Section 50C makes a special provision for determining the full value of consideration in cases of transfer of immovable property. It provides that where the consideration declared to be received or accruing as a result of the transfer...

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No transfer u/s 2(47)(v) in absence of possession of land to JDA

ITO Vs State Bank of India Staff Vaibhav Co-op. HSG. Ltd. (ITAT Mumbai) - Since possession of land was not handed over to the Developer by assessee-society, therefore, there could not be any transfer within the meaning of section 2(47)(v) read with section 53A of Transfer of Property Act, 1882, even based on part performance of the contract. Accordingly. there was no liab...

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Brokerage paid by purchaser cannot be taken into account for Section 50C

ITO Vs Smt. Rajani Manhar Bhagat (ITAT Ahmedabad) - Since the market value of immovable property sold by assessee had to be Rs.2,60,05,348/- and the purchase consideration together with costs towards obtaining vacant property should stand at Rs.2,26,00,000/-, therefore, the long term capital gain would be Rs.34,05,348/- as per section 50C and the bro...

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Assessee entitled to challenge correctness of DVO’s valuation before CIT(A)

Lovy Ranka Vs DCIT (ITAT Ahmedabad) - Section 50C is a deeming provision and Assessing Officer is obliged to compute capital gains by taking valuation arrived at by DVO in place of the actual consideration received by assessee,  assessee is entitled to challenge correctness of DVO's valuation before CIT(A) and ITAT. DVO has to be given...

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S. 50C Addition without reference to Valuation Officer not justified

Jayashree Kothari Vs ITO (ITAT Hyderabad) - Jayashree Kothari Vs ITO (ITAT Hyderabad) Sec. 50C(2) enables the Assessing Officer to make a reference to the Valuation Officer. Whenever a reference is made by the AO to the Valuation Officer, such reference has to be construed as a reference made under sec. 16A(1) of the Wealth-tax Act. We have a...

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FMV of capital asset can be determined only after hearing objections of assessee

Ms. Jagannathan Sailaja Chitta Vs ITO (Madras High Court) - Since a bare reading of scheme of Section 50C would show that assessee could object to presumptive value as per Section 50C (1) and, therefore, it was only after hearing the objections of assessee, the fair market value of capital asset as per 'Guidance Value' could be determined by authorities, the...

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Recent Posts in "section 50C"

Section 45(3) AO cannot disturb value of consideration recorded in books of firm

Shri Sarrangan Ashok Vs ITO (ITAT Chennai)

Provision of section 45(3) are exhaustive and does not confer any power on the AO to adopt consideration different from what is recorded in the books of account of the firm. Thus, AO was not correct in adopting the market value of land as revalued subsequently by the firm in the books of account....

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‘Undervalued’ vs ‘Understated’ Capital Asset- Fiction of Fair Value

It is a well settled and in substance a legal precedent that what is subject to tax is a real income. The principle of real income has been subject matter of intrinsic litigation in past and the possibility of probable dispute on the scope of what constitutes real income in days to come cannot be completely ruled out despite there have be...

Read More
Posted Under: Income Tax |

No transfer u/s 2(47)(v) in absence of possession of land to JDA

ITO Vs State Bank of India Staff Vaibhav Co-op. HSG. Ltd. (ITAT Mumbai)

Since possession of land was not handed over to the Developer by assessee-society, therefore, there could not be any transfer within the meaning of section 2(47)(v) read with section 53A of Transfer of Property Act, 1882, even based on part performance of the contract. Accordingly. there was no liability of capital gain tax under section ...

Read More

Certain instances of tax planning in case of sale of house property

The last 4-5 years have not been the best period for the real estate industry in India. Many real estate companies have become bankrupt and many still continue to be under great financial stress due to stalled projects. Even a normal home buyer is not in a profitable position due to declining property rates. The […]...

Read More
Posted Under: Income Tax |

Time to Revisit Section 50C/43CA/56(2) – Adoption of Circle Rates

Time to Revisit Section 50C/43CA/56(2) of Income Tax Act concerning Adoption of Circle Rates for Computation of Capital Gain/Business Profits/Income from Other Sources on Land & Building!! The Finance Act 2002 has introduced a new section 50C with effect from 1-4-2003, for the purpose of computation of capital gains in real estate tra...

Read More
Posted Under: Income Tax |

Brokerage paid by purchaser cannot be taken into account for Section 50C

ITO Vs Smt. Rajani Manhar Bhagat (ITAT Ahmedabad)

Since the market value of immovable property sold by assessee had to be Rs.2,60,05,348/- and the purchase consideration together with costs towards obtaining vacant property should stand at Rs.2,26,00,000/-, therefore, the long term capital gain would be Rs.34,05,348/- as per section 50C and the brokerage costs incurred on sale considerat...

Read More

Pre-Budget Memorandum 2019- A Small Wish List From New Finance Minister

Union Budget 2019 – New Finance Minister Smt. Nirmala Sitharaman’s first budget after the huge and unprecedented electoral win of Sh. Narendra Modi Government has the backing of a mammoth public mandate and as such is expected to be a reform oriented budget and not a populist one. However, along with the bold and reform […]...

Read More
Posted Under: Income Tax |

6 Suggestions for Amendments in Income Tax Act by BCAS

Bombay Chartered Accountants' Society has made a Representation on 'Suggestions for Amendments in the Income Tax Act', on 24th May, 2019, to the Joint Secretary TPL, Central Board of Direct Taxes, Ministry of Finance, Government of India....

Read More
Posted Under: Income Tax |

Assessee entitled to challenge correctness of DVO’s valuation before CIT(A)

Lovy Ranka Vs DCIT (ITAT Ahmedabad)

Section 50C is a deeming provision and Assessing Officer is obliged to compute capital gains by taking valuation arrived at by DVO in place of the actual consideration received by assessee,  assessee is entitled to challenge correctness of DVO's valuation before CIT(A) and ITAT. DVO has to be given an opportunity of hearing...

Read More

S. 50C Addition without reference to Valuation Officer not justified

Jayashree Kothari Vs ITO (ITAT Hyderabad)

Jayashree Kothari Vs ITO (ITAT Hyderabad) Sec. 50C(2) enables the Assessing Officer to make a reference to the Valuation Officer. Whenever a reference is made by the AO to the Valuation Officer, such reference has to be construed as a reference made under sec. 16A(1) of the Wealth-tax Act. We have also carefully gone through […]...

Read More

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