2022 (12) TMI 1119 - AT - Income Tax

Capital gain computation - invoking section 50C - CIT(A) held that the Stamp Duty valuation comes into picture, only when the sale deed is put for registration. Therefore the assessee s argument that the Jantri value of 2006 cannot be adopted, when the registration taken place only in 2011 - argument of the assessment namely since the possession of the property given in 2006-07 capital gain cannot be assessed during the AY 2012-13 - HELD THAT - To meet the ends of justice, we deem it fit to set aside the matter back to the file of the Assessing Officer with a direction to the assessee to produce the bank accounts relating to the transaction on 15.09.2006 and 16.10.2006 and produce the copies of the bank statements, so as the Assessing officer can invoke second proviso to Section 50C of the Act. Needless to state, the assessee should cooperate with the Assessing Officer by producing the relevant bank statements, so as the A.O. can pass a fresh assessment order. For this reason, the appeal is allowed for statistical purposes.

Summary

Issues:
1. Assessment of Long Term Capital Gain on sale of property.
2. Application of Section 50C of the Income Tax Act, 1961.
3. Admissibility of bank statements as evidence.

Analysis:

Issue 1: Assessment of Long Term Capital Gain
The appellant, a pathologist doctor, declared Long Term Capital Gain on the sale of two shops. The Assessing Officer disputed the declared value based on Sub-Registrar Office records and adopted a higher value for computation of capital gains. The appellant argued against the adoption of Jantri value, citing poor property location affecting market value. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision, rejecting the appellant's contentions. The appellant appealed, challenging the addition of capital gains. The tribunal allowed the appeal for statistical purposes, directing the appellant to produce bank statements for specific transactions to enable a fresh assessment.

Issue 2: Application of Section 50C
The Assessing Officer applied Section 50C to substitute the sale value with Jantri value for capital gains calculation. The appellant contested this, claiming possession was transferred earlier, and hence, the 2006 Jantri value should apply. The Commissioner of Income Tax (Appeals) rejected this argument, emphasizing the date of registration for Stamp Duty valuation. The tribunal directed the appellant to provide bank statements for specific transactions to consider invoking the second proviso to Section 50C for a revised assessment.

Issue 3: Admissibility of Bank Statements
During the proceedings, the absence of bank statements reflecting crucial transactions was noted. The Revenue representative requested the tribunal to direct the appellant to furnish these bank statements to enable a revised assessment under Section 50C. The tribunal, considering the importance of the bank statements as evidence, allowed the appeal for statistical purposes, emphasizing the need for cooperation in producing relevant bank statements for a fresh assessment.

In conclusion, the tribunal's decision in this case revolved around the assessment of Long Term Capital Gain, the application of Section 50C, and the necessity of bank statements as evidence for accurate computation of capital gains. The tribunal's direction for the appellant to provide bank statements highlights the significance of supporting documentation in tax assessments, ensuring fairness and compliance with statutory provisions.