2009 (9) TMI 688 - AT - Income Tax

Summary

Issues involved:
The only issue involved in this appeal relates to Long Term Capital Loss claimed by the assessee on the sale of a bungalow.

Summary:
The assessee purchased a bungalow and later sold it at a lower price, resulting in a Long Term Capital Loss claim. The Assessing Officer disagreed with the sale price and referred the matter to the District Valuation Officer. The Fair Market Value determined by the DVO was higher than the sale price, leading to a minimal Long Term Capital Loss calculation by the Assessing Officer. The CIT(A) upheld this decision based on the property value escalation in the area. However, the ITAT Ahmedabad found that the Assessing Officer's reference to the Valuation Officer under section 55A was not valid for determining the full value of consideration. They clarified that section 55A pertains to Fair Market Value, not the full value of consideration. As section 50C was not applicable, the ITAT directed the Assessing Officer to recalculate the capital gain using the sale price as the full value of consideration, thereby allowing the appeal filed by the assessee.