ITAT affirms AO's decision under section 50C of Income Tax Act: no gift adjustment allowed in property transfers.

The ITAT upheld the decisions of the lower authorities regarding the addition made by the AO under section 50C of the Income Tax Act, 1961, emphasizing that no adjustment for gift is allowed in determining the full value of consideration for land or building transfers. The appeals by the Assessees were dismissed, affirming the authorities' decision to consider the stamp duty value as the sale consideration for calculating short-term capital gains.

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Issues:
1. Confirmation of addition made by AO for Rs. 5,77,000 instead of deletion in entirety.

Analysis:
The judgment involves appeals by different Assessees against orders of the Commissioner of Income Tax(Appeals) related to assessment under section 143 of the Income Tax Act, 1961 for Assessment Year 2012-13. The primary issue in ITA No. 992/AHD/2019 was the addition of Rs. 5,77,000 by the AO, which the assessee contested, claiming it should be deleted entirely. The assessee sold a property jointly with his wife for Rs. 59 lakhs, showing his share at Rs. 29,50,000. The AO, however, valued the property at Rs. 89,27,000 for stamp duty purposes, resulting in an addition of Rs. 15,13,500 as short-term capital gain under section 50C of the Act.

The assessee argued that the excess stamp duty value should be considered a gift to a relative, not part of the sale consideration. The CIT (A) directed the AO to adopt the value determined by the DVO at Rs. 70,54,000 as the sale consideration. Despite the assessee's claim that the excess value represented a gift, the CIT (A) upheld the AO's decision. The ITAT noted that under section 50C, the stamp duty value is deemed as the sale consideration unless disputed. The DVO valued the property at Rs. 70,54,000, leading to the CIT (A) instructing the AO to consider Rs. 35,27,000 as the sale consideration for short-term capital gain calculation.

The ITAT highlighted that section 50C aims to substitute stamp valuation for the full value of consideration in land or building transfers. It clarified that no adjustment for gift is allowed under section 50C. Consequently, the ITAT dismissed the appeal, affirming the authorities' decision. In a similar case, ITA No. 993/Ahd/2019 for AY 2012-13, the issues were identical to ITA No. 992/AHD/2019. The ITAT applied the findings of the former case to the latter, leading to the dismissal of the Assessee's appeal in both instances.

In conclusion, the ITAT upheld the decisions of the lower authorities regarding the addition made by the AO, emphasizing the application of section 50C and the absence of provisions for gift adjustment in determining the full value of consideration. Both appeals by the Assessees were dismissed by the ITAT.

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