2018 (9) TMI 1087 - AT - Income Tax

Invocation of section 50C - adopting value of the property as per SRO by considering section 50C on the date of registration - Held that - The assessee has sold a piece of land on 07/08/2008, and as on the date of registration, the SRO value of the property is ₹ 31,10,000/-. However, the assessee has only shown as a sale consideration received by her at ₹ 25.00 lakhs. When AO asked the assessee to explain, it was submitted that actual registration has took-place on 31/07/2008 as there was some dispute and therefore, the higher value cannot be accepted. The assessee neither filed any supportive evidence before the Assessing Officer nor before the CIT(A). Even before the Tribunal except stating that sale consideration was received on 31/07/2008 as there is a dispute in respect of property, but not filed any such details. Therefore, the authorities below have adopted the value of the property as per SRO by considering section 50C on the date of registration. No infirmity in the order of the CIT(A). - Decided against assessee. Disallowance of development expenses - addition as no evidence is filed - Held that - On appeal, ld. CIT(A) has considered 1.00 lakh for improvement of the property and directed the Assessing Officer to re-compute the capital gains. We find no infirmity in the direction of the ld. CIT(A) to re-compute the capital gains. Thus, this ground of appeal raised by the assessee is dismissed.

Summary

Issues:
1. Invocation of section 50C of the Income Tax Act, 1961.
2. Disallowance of development expenses.

Issue 1: Invocation of section 50C of the Income Tax Act, 1961:
The appeal concerned the invocation of section 50C of the Income Tax Act, 1961. The assessee had sold a site for a consideration of ?31.10 lakhs, but declared only ?25.00 lakhs as the sale consideration. The Assessing Officer adopted ?31.10 lakhs as the sale consideration in accordance with section 50C. The assessee contended that the registration was supposed to take effect on 31/07/2008, but due to a dispute, it was postponed to 07/08/2008. The appellate authority rejected the assessee's explanation, stating that the transfer was only effected on 07/08/2008 when the transaction was registered. The authorities upheld the adoption of ?31.10 lakhs as the full value of consideration. The Tribunal found no infirmity in the lower authorities' decision and dismissed the appeal.

Issue 2: Disallowance of development expenses:
The Assessing Officer disallowed the entire expenditure claimed by the assessee for development/improvement of the property due to lack of evidence. On appeal, the CIT(A) allowed ?1.00 lakh for property improvement and directed the Assessing Officer to re-compute the capital gains. The Tribunal found no issue with the CIT(A)'s direction to re-compute the capital gains based on the allowed amount. Consequently, this ground of appeal raised by the assessee was also dismissed. Overall, the appeal filed by the assessee was dismissed, and the order was pronounced in open court on August 10, 2018.