TaxTMI 
TaxTMI 
2019 (8) TMI 502
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....as transferred the asset to a relative at a price lower than the market value. b) The difference between the market price and the transaction value is the gift made by the assessee to his relative. c) The relative is covered u/s 56(2)(vi) of the Act. d) The affidavit filed by the appellant, explaining that the transaction was a gift was ignored by CIT(A). 3. Briefly stated, the facts are that the assessee filed his return of income for the assessment year (AY) 2013-14 on 03.01.2014 declaring total income of Rs. 3,48,000/-. During the course of assessment proceedings, the Assessing Officer (AO) noticed that the assessee has not shown any capital gains from sale of property ; however, as per ITS details, the assessee had sold an immovable property for Rs. 28,00,000/- under the registration No. 2982/2012 and the stamp valuation of the property was Rs. 41,64,500/-. In response to a query raised by the AO to explain why provisions of section 50C should not be applied in this case, the assessee filed the copy of the sale agreement and purchase agreement along with computation of capital gains and explained that the accountant, through oversight, missed out o....
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....done." 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). By his order dated 12.05.2017, the Ld. CIT(A) held: "5. I have considered the submissions of the appellant as well as order u/s 143(3) of the IT. Act. In the assessment order, the Long Term capital gain was computed on sale of flat as per provisions of Section 50C and subjected to tax by the AO. The assessee did not offer any capital gain on sale of the said flat in its return of income. As per deed of transfer [conveyance deed], the premises have been sold and transferred for the price of Rs. 28,00,000/-. The transferees have paid in full to the transferor before the execution of the transfer deed. The stamp duty and registration charges payable on the deed of transfer was borne and paid by the transferees which is the norms in any sale transactions. Therefore, to hold the transaction as gift even partially is not at all justified from any angle. In a gift, there is no role of any price or consideration. The plea of partial gift and partial sale is just an after-thought and chance taken by the assessee to minimize the tax liability after being caught. As per transfer deed, t....
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....y is not at all justified from any angle as examined by the Ld. CIT(A). Supporting the order of the Ld. CIT(A), the Ld. DR submits that the plea of partial gift and partial sale is just an afterthought. As per the transfer deed, the entire price of the premises was paid by the transferees and there is nothing left to be gifted. Thus the Ld. DR submits that the order passed by the Ld. CIT(A) be affirmed. 7. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decision are given below. In the instant case, the assessee has transferred to his relative 'Flat No.804' for sale consideration of Rs. 28,00,000/-. As admitted by the assessee in the 'statement of facts' filed before the Ld. CIT(A) along with Form No. 35 dated 11.02.2016, his accountant erroneously omitted to record the said entry in his books of accounts and hence the same could not be offered to tax while filing the return of income on 03.01.2014. As per the deed of transfer dated 11.04.2012, the assessee (transferor) sold the above immovable property to Smt. Nilufer Casmiro Lobo & Shri Casmiro Leopold Lobo (the transferees) for a sum of Rs. 28,00,000/-. The assess....
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....ceptions enacted in the proviso to that section 56(2)(vi). It is mandated by the proviso to section 56(2)(vi) that the provisions of section 56(2)(vi) shall not apply to any sum of money received- a. from any relative [as defined]; or b. on the occasion of the marriage of the individual; or c. under a will or by way of inheritance; or d. in contemplation of death of the payer. e. from any local authority as defined in the Explanation to section 10(20); or f. from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in section 10(23C); or g. from any trust or institution registered under section 12AA. According to the Explanation to section 56(2)(vi), the term 'relative', for the purposes of that section 56(2)(vi), means- i. spouse of the individual; ii. brother or sister of the individual; iii. brother or sister of the spouse of the individual; iv. brother or sister of either of the parents of the individual; v. any lineal ascendant or descendant of the individual; ....
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.... be deemed to be the value of the consideration, and capital gains shall be computed on the basis of such consideration u/s 48 of the Act. As per section 45(1) any profits or gains arising from the transfer of a capital asset effected in the previous year, shall be chargeable to Income tax under the head 'Capital Gains' and shall be deemed to be the income of the previous year in which transfer took place unless such capital gain is exempt under provisions of the Act. 7.5 The contentions of the assessee are that provision of section 50C is not applicable because (i) he has transferred the above immovable property to one of his relative and (ii) the difference between the transaction value and stamp duty value is the gift made by the assessee to the relative. The above contentions are farfetched because the assessee has not filed any gift deed either before the AO or CIT(A) or the ITAT. The attempt to rope in section 56(2)(vi) by the assessee fails because there is no gift deed. All the more, as mentioned earlier, the assessee had not disclosed any capital gains from the sale of the above property. Only after the AO noticed that the assessee had sold an immovable property a....