2010 (11) TMI 1074 - HC - Income Tax

Summary

Issues involved: Claim of exemption u/s 54 (F) of the Income Tax Act, valuation of property purchased by the assessee.

Claim of exemption u/s 54 (F) of the Income Tax Act:
The respondent/assessee filed a return for the year 2003-04 claiming exemption u/s 54 (F) of the Income Tax Act based on the purchase and sale of shares of M/s Suma Finance and Investment Ltd. The Assessing Officer initially denied the exemption, stating that the shares were sold demat to the company in March 2002, which he considered as the date of purchase. However, the Income Tax Appellate Tribunal (ITAT) overturned this decision, holding that the date of purchase should be considered as March 2001 and April 2001. Consequently, the gain was treated as long term capital gain, and the assessee was deemed eligible for exemption u/s 54 (F) of the Act.

Valuation of property purchased by the assessee:
The Assessing Officer made additions to the valuation of the property purchased by the assessee, disagreeing with the value stated in the sale deed and estimating it at a higher amount based on a valuation by the DVO. The ITAT ruled in favor of the assessee, stating that the DVO's estimated value cannot be accepted without evidence that the sale consideration was understated in the registered sale deed. This issue was supported by a previous decision of the Delhi High Court. Ultimately, the High Court found no question of law arising from the case and dismissed the appeal.