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TMI Blog2012 (9) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... rom capital gain. Section 48 empowered to AO to calculate the capital gain. For calculation of capital gain full value of the transaction received or accruing as a result of the transfer of the capital assets following amount is to be deducted (i) expenditure incurred wholly and exclusive in connection with such transfer (ii) the cost of acquisition of the assets and the cost of any improvement there on. Further, indexation on cost of acquisition and cost of improvement is to be allowed. The various High Courts have held that full value of consideration u/s 48 cannot be construed fair market value as per Section 55A of the IT Act, thus A.O. was not justified in substituting the fair market value in place of full value of consideration - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and had given the wrong computation of Long Term Capital Gain by adopting incorrect indexation. 2. The factual matrix of the case is that the assessee has shown long term capital loss on property A-1-23, Ishwarshanti Society, Karelibaug sold on 28.02.2008 at a price of Rs.14,00,000/-. The cost of acquisition is Rs.10,49,237/- as on 1991 which after Indexation comes to Rs.29,05,174/-. As the appellant claimed loss under the head capital gain, therefore, ld. A.O. has referred the property u/s 55A of the IT Act for fair market value of the property on date of sale to the District Valuation Officer who estimated the fair market value of the property Rs.24,04,400/- against the consideration of Rs.14,00,000/- shown in the sale agreement. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Term Capital Gain on the said property. 3. Being aggrieved by the order of the A.O., the appellant carries the matter before the CIT(A) who has deleted the addition after considering the Hon ble Delhi High Court decision in case of Commissioner of Income-tax vs. Smt. Nilofer I. Singh (2009) 309 ITR 233 and has held as under:- 5.2 I have considered the facts of the case as well as the observation of the AO and the arguments advanced by the AR. The AO has not brought any material on record to show that actual consideration received by the appellant is more than the consideration shown by the Appellant. Except for the situations mentioned in Section-50C, there is no provision in the Act which allows adoption of fair market value of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that some of the considerations that led to the addition are apparently irrational and irrelevant for computing income under Income-tax Act. These observations are to the effect that generally it is not possible to incur loss on sale of property and transactions in cash are rampant in transactions of property. In such an event, understatement of income being rampant, all Income-tax returns filed in the country will need to be disbelieved. ii) It is secondly submitted that the Assessing Officer was not entitled to make a reference to valuer. The valuer was not justified in valuing the property in the manner he did. The valuation by stamp duty authorities was in accordance with norms determined by the Government. That there was no loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Commissioner Of Income-Tax V. Smt. Nilofer I. Singh reported at 2009-(309)-ITR -0233 -DEL . This decision relates to Assessment Year 1998-99 which is long after insertion of section 55A and deletion of section 52. Hence the Assessing Officer's reasons for ignoring the other decision on that ground do not survive. We would add that at one point of time, section 52 contemplated adoption of market value in place of actual consideration. Even when that provision was there, Supreme Court in case of K.P. Verghese market value cannot be adopted unless there is evidence of receipt of extra consideration. Now with deletion of section 52, the decision in case of K.P. Verghese much more applicable rather than not being applicable. iv) The de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir market value as per Section 55A of the IT Act. The Hon ble Delhi High Court has held the similar view in case of Commissioner of Income-tax vs. Smt. Nilofer I. Singh (supra) after considering Hon ble Supreme Court decision in case of CIT v. George Hinderson Co. Ltd (1967) 66 ITR 622. The full value consideration is mean, the full value of consideration received by the transferee in exchange of the capital assets transferred by him. The Hon ble Supreme Court also observed that in the case of full value consideration is the full sale price is actually paid. It was further of the view that the expression full value means the whole price without any deduction, whatsoever and it cannot refer to the adequacy or inadequacy of the price barga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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