TaxTMI 
TaxTMI 
2011 (11) TMI 352
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....ary and against the facts of the case. Relief may please be granted by allowing the exemption under section 54EC in respect of long term capital gains." 3. The facts in brief are that assessee sold property for Rs. 40 lacs on 12.1.2006 by way of registered Sale Deed. For the purposes of imposing stamp duty, the value adopted by Sub Registrar was Rs. 74,58,880/-. The AO was of the view that provisions of section 50C are applicable on the facts of the present case. Therefore, a show cause notice was given as to why the sale value of this plot be not adopted at Rs. 74,58,880/- against the sale consideration shown by assessee. Detailed submissions were filed before AO which is reproduced in the order of AO from pages 2 to 20. After considering the reply of the assessee, the AO was not satisfied as in his view the provisions of section 50C are clearly applicable. Accordingly he revalued the capital gain. The AO took the value determined by DVO under section 50C at Rs. 67,12,600/-. Assessee has shown indexed cost of Rs. 13,26,990/- which was reduced by the AO. After reducing the same, the long term capital gain computed by AO at Rs. 53,85,610/-. Since assessee has made investment in B....
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....l asset the expenditure incurred in connection with transfer and the cost of acquisition of the asset and the cost of any improvement thereto. Hence, we will have to first ascertain the full value of the consideration. In respect of transfer of capital asset being land or building, full value of the consideration to be adopted for the purpose of Section 48 is defined in Section 50C of the Income tax Act. It will be useful to reproduce Section 50C(1) of the Income tax Act. ''50C(1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the ''stamp valuation authority'') for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purpose of Section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer.'' 7.1 From the above sub-section, it is clear that in case the consideration received is less than the adopted value the value ....
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....n to capital gains. Sub-section (1) was in pari material to Section 45(1) of the present Act and subsection (2) of Section 12B of the 1922 Act was in pari material to the provisions of Section 48 of the present Act. The Supreme Court was of the view that the expression 'full value of consideration' in the main part of Section 12B(2) of the Act cannot be construed as having a reference to the market value of the asset transferred but the expression only meant, the full value of a consideration received by the transferor in exchange of the capital asset transferred by him. The Supreme Court also observed that in the case of a sale the full value of consideration is the full sale price actually paid. It was further of the view that the expression 'full value' means the whole price without any deduction, whatsoever, and it cannot refer to the adequacy of the price bargained for. Nor did it have any necessary references to the market value of the capital asset which is the subject matter of the transfer.'' Hence, the meaning full value of consideration as mentioned in different provisions of the Act except in Section 48, one will have to consider the full valu....
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.... by any expenditure incurred wholly and exclusively in connection with such transfer.'' 7.3 In Explanation to Section 54F(1), it is mentioned that net consideration means the full value of consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. The meaning of full value of consideration in Explanation to section 54F(1) will not be governed by meaning of word of full value of consideration as mentioned in Section 50C. The value adopted for stamp duty is to be considered as full value of consideration for the purpose of computing the capital gains u/s 48. Section 54F(1) says that capital gains is to be dealt with in accordance with the provisions of sub-section (a) and (b) of Section 54F(1) of the Act. In the instant case , the cost of new asset is not less than the net consideration then the whole of the capital gains will not be charged even if the capital gains has been computed by adopting the value adopted by Stamp Registration Authority. It is clearly mentioned in Section 54F(4) also that net consideration which is not appropriated towards the p....