ITAT directed AO to adopt actual sale consideration of property received
ITAT directed AO to adopt actual sale consideration of property received
Assessee along with other co-owners of a property sold the property for Rs 4.35 crores. She offered her proportionate share of capital gains by adopting actual sale consideration. AO computed LTCG u/s 50C (of Income Tax Act, 1961) by adopting valuation by stamp duty authority. CIT(A) upheld AO’s order. ITAT restored the matter to AO with the direction to AO to adopt sale value of the property as per actual consideration received by assessee.-500694
1. Assessee was a 5% co-owner of a property along with 14 other persons.
2. She along with the other co-owners entered into a development agreement for a consideration of Rs 4,35,00,000.
3. She offered capital gains on the said property by adopting the actual sale consideration and accordingly offered her proportionate share to taxation for capital gains.
4. AO computed the long term capital gains u/s 50C (of Income Tax Act, 1961) in respect of share of the assessee adopting the value of the DVO at Rs.11,88,64,105.
5. AO later passed an order u/s 154 (of Income Tax Act, 1961) by taking the value of the property as determined by the Stamp Valuation Authority at Rs.9 crores.
6. Ao held that since the assessee had not furnished any documentary evidence as to the valuation as on 01.04.81, therefore the value of the property was adopted at Rs.1,62,651.
7. CIT(A) upheld the AO’s order.
On appeal, the ITAT held as under:
8. We therefore, direct the AO to adopt the sale value of the property as per the actual consideration received by the assessee and not on the basis of value of the stamp duty authority.
9. It is the duty of the taxing authorities to collect the tax which is actually and rightly payable by the assessee as per the relevant provisions of the Act and not to punish the assessee for any inadvertent mistake on his part.
10. We therefore, restore the matter on this issue to the file of the AO with the direction to adopt the cost of acquisition of the property as per the provisions of the Act as on 01.04.81 and with indexation benefit thereupon in accordance with law.
Case Reference - Mrs Razia Alimahomed Esmail vs The Income-tax Officer.
IN THE INCOME TAX APPELLATE TRIBUNAL,MUMBAI BENCH "J", MUMBAI
BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND
SHRI SANJAY GARG, JUDICIAL MEMBER
ITA No.7360/M/2007
(Assessment Year: 2004-05)
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