ITO, NEW DELHI vs. SMT. POONAM CHOPRA, NEW DELHI

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ITA 4406/DEL/2016Status: DisposedITAT Delhi03 June 2019AY 2007-082 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 50C of the Income Tax Act, which was the basis for the AO's addition, was not applicable to the assessment year in question as it came into effect later. Therefore, the addition made by the AO was deleted.

What were the facts?

The assessee sold a property in AY 2006-07 and declared capital gains in AY 2010-11. The Assessing Officer (AO) deemed the transfer to be in AY 2007-08 and made an addition based on a Valuation Officer's report.

What were the issues?

The primary issue was the applicability of Section 50C to the assessment year 2007-08 for determining capital gains on property sale.

Which sections of the Income-tax Act were involved?

Section 50C

AI-generated summary — verify with the full judgment below

Before: Shri H.S. Sidhu & Shri B.R.R. Kumar

Hearing: 03.06.2019Pronounced: 03.06.2019

ORDER Per B.R.R. Kumar, A.M.: The Revenue has filed this appeal against the order dated 02.06.2016 of ld. CIT(A)-17, New Delhi on the following grounds :

“1. That the Ld. CIT(A) erred in law and on facts of the case in deleting the addition of Rs.1,16,42,250/- made on account of long term capital gain, when the fair market value of the property is more than the sale consideration recorded in the agreement to sell.

2. That the Ld. CIT(A) erred in law and on facts of the case in deleting the addition of Rs.1,16,42,250/- made on account of long term capital gain when the A.O. has correctly taken the fair market value as sale consideration in absence of stamp duty valuation u/s. 50C of the Income Tax Act.”

2.

The moot issue involved is whether the provisions of section 50C are applicable to the assessee for the assessment year 2007-08.

3.

The brief facts are that the assessee has sold the property in the assessment year 2006-07 and has shown capital gains in assessment year 2010-11 on receipt of full and final payments towards the consideration. As per the provisions of section 2(47), the Assessing Officer deemed it to be transfer during the current assessment year. The property was referred to the Valuation Officer and the valuation report has been obtained. Based on the valuation report, the Assessing Officer made the addition in the current year, i.e., 2007-08. We find that the provisions of section 50C came into existence vide Notification dated 18.07.2007. Therefore, it is not applicable to the year in question. Hence, the addition made by the Assessing Officer is hereby deleted and the order of the ld. CIT(A) is upheld.

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