2015 (12) TMI 131

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....50C(2) of the Act for computation of capital gains. 3. The facts of the case are the assessee admitted nil income under the head capital gain as per the working furnished in the return. During the assessment proceedings, the AO found that the assessee adopted Rs. 3,00,000/- per ground as on 01.04.1981 to arrive at cost of the property sold. By using inflation index, the cost of the property sold was arrived at Rs. 2,01,04,271/-. Long Term Capital Gain was worked out at Rs. 81,14,521/- (2,82,18,794 - 2,01,04,271). Assessee's share works out to Rs. 27,04,840/- (1/3rd share). She invested Rs. 30,00,000/- in NABARD bonds u/s 54EC of the Act and returned nil capital gain. Not satisfied with the above working furnished by the assessee, the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ied by the AO. Finally, it was pleaded before the CIT(Appeals) that the assessment was taken up at the last leg of limitation and no opportunity was granted which resulted in gross violation of the principles of natural justice to prove that the valuation adopted by the Stamp Valuation Authority exceeds the fair market value of the property. Therefore the assessee prayed to the CIT(A) to direct the AO to refer the property to Valuation Officer and to give opportunity to the assessee to prove her case. Based on the above submission, the then CIT(A)-XII, Chennai in his order in ITA No.102/2008-09 dated 01.04.2011 directed the AO to refer the property to the Valuation Cell of the Department and then afford an opportunity to the assessee. Accor....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....putation of capital gain as per subsection( 1) of sec.50C of the I.T. Act. Further, he observed that a perusal of the copy of the sale deed executed by the assessee and others in favour of M/s. True Value Homes India Pvt. Limited reveals that the market value of the property was mentioned assessee's Rs. 2,82,18,792/-. The AO found that the value adopted for cost indexation was high and referred the matter to the Registration Department to find out the guideline value of the property as on 01.04.1981. The Sub-Registrar, Purasawalkam, Chennai in his letter dated 13.10.2008 informed the AO the guideline value/ground at Rs. 30,000/- as on 01.04.1981. The AO in his letter dated 07.11.2008 addressed to the assessee gave opportunity to show cause ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.....) is not relevant because section 50C was not in the statute at the relevant period i.e. during AY 1981- 82. According to the CIT(Appeals), the case law relied on by the assessee in the case of CIT v. Chandni Buchar [323 ITR 510](P&H) and in the case of CIT vs. Khoobsurat Resorts (P.) Ltd. [211 Taxman 510] (Delhi H.C.) are also not applicable because in those cases the difference between market value adopted for stamp duty and the sale consideration received was sought to be taxed in the hands of the buyer of the property. The issue for consideration in the present case is different and capital gain is brought to tax here in the hands of the seller of the property as per the specific provisions of sec. 50C brought into statute for this pur....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....iled the opportunity. Where no claim is made at all by the assessee disputing the substitution of stamp duty value for the consideration declared by the AO, the provision is bound to be applied. The CIT(Appeals) placed reliance on the following case laws: 1.Mohd Shoib vs DCIT(2010) 1 ITR (Trib.) 452 (Lucknow) 2.Ambattur Clothing Co.Ltd.v ACIT [326 ITR 245] (Mad.) 4.4 Regarding objection of the assessee to the adoption of guideline value as on 01.04.1981 for arriving at the cost of the property sold, the CIT(Appeals) observed that the assessee's contention is not tenable. The assessee's valuation @ Rs. 3,00,000/- per ground has no basis either in the form of comparative sale made at that time or value assessable for stamp du....