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TMI Blog2009 (11) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... me from house property at Rs. 92,400 and agricultural income of Rs. 1,43,200. The assessment has been completed at an income of Rs. 20,29,292 wherein addition of Rs. 19,42,312 has been made on account of capital gains on sale of land. The assessee had sold a piece of land measuring 4 Kanal 10 Maria vide sale deed dt. 14th March, 2005 for a total consideration of Rs. 4,50,000. The AO has adopted the total sale consideration at Rs. 24,32,612 against the sale consideration of . Rs. 4,50,000 declared by the assessee which has resulted in addition of Rs. 19,42,312. 3. A search and seizure operation under s. 132(1) of the Act was carried out in G.K. Estate Group of cases, including in the case of S/Shri Harsh Sood and Ashish Sood. During the course of search, some documents relating to the purchase of land by G.K. Estate Group from the respondent assessee and some other persons were found and seized. The seized documents revealed that the assessee had sold land measuring 4 Kanal K) Maria on 14th March, 2005. It was also revealed that the assessee along with his brother Shri Amarjit Singh had sold land measuring 17 Kanal 18 Marla to S/Shri Gulshan Kumar, Sukhjinder Singh and Ashish Sood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, there was no financial crisis on the assessee which would have led the assessee to sell his smaller piece of land of 4 Kanal 10 Maria for a lower consideration. The AO also made a generalized observation that there were number of instances found during search where the actual sale rate was higher than the consideration of land shown in the registration deeds. The AO, accordingly concluded that in the circumstances and facts of the case, the actual consideration was not less than Rs. 43,25,000 per acre of land sold by the assessee. Accordingly, with regard to the sale of 4 Kanal 10 Maria of land, the consideration received by the assessee was assumed at Rs. 43,25,000 per acre and long-term capital gain was computed as under : Sale consideration as discussed above Sale consideration as discussed above Rs. 24,32,812 Less : Brokerage as claimed Rs. 4,500 Net sale consideration Rs. 24,28,312 Cost of acquisition Rs. 4,86,000 Long-term capital gain Rs. 19,42,312 Accordingly, an addition of Rs. 19,42,3121 was made to the total income. The assessee carried the said addition in appeal before the CIT(A). Before' the CIT(A), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Departmental Representative pointed out that the AO was justified in rejecting the sale consideration stated in the registered sale deed because the other piece of land measuring 17 Kanal 18 Maria owned by the assessee has been sold for a much higher price. In this manner, the learned Departmental Representative has attempted to justify the computation of long-term gain on sale of 4 Kanal 10 Maria of land as considered by the AO. 9. On the other hand, the learned counsel for the respondent assessee has defended the order of the CIT(A) and has pointed out that the AO did not have the jurisdiction to disregard the actual consideration declared by the assessee in the registered sale deed. The learned counsel further pointed out that, in this case, the assessee had explained the reasons for the variation in sale consideration which have been reproduced by the AO in the order of assessment. Our attention was invited to the replies of the assessee furnished during the assessment proceedings which, according to the learned counsel, clearly point out that there were justifiable reasons for accepting lower sale price for land measuring 4 Kanal 10 Maria and also the fact that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f transfer which is liable to be considered in computing the gain. In the case on hand, the controversy revolves around the adoption of "full value of the consideration" for the purposes of computing capital gains. The assessee considered the consideration stated in the registered sale deed as "full value of the consideration" for the purpose of computing capital gain on sale of 4 Kanal 10 Maria of land. The AO, on the other hand, has disputed the adoption of the stated consideration as the full value of consideration. 12. In our considered opinion, the action of the AO is not in consonance with the legal position. In this regard, a reference may be made to the judgment of the Hon'ble Supreme Court in the case of George Henderson &: Co. Ltd. (supra) wherein the Hon'ble Court considered the meaning of expression "full value of the consideration" in the context of taxability of capital gains that as per the provisions contained in the erstwhile IT Act, 1922. However, the meaning ascribed to such, expression by the Hon'ble Supreme Court holds good even in the context of the present statutory provisions. According to the Hon'ble Supreme Court, the expression "full valu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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