Capital gain

This query is : Resolved

AMIT RATHI (Querist)
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14 January 2014 THE ASSESSEE SOLD HIS LAND OF RS.50000/-(COST) & MADE REGISTRY OF RS 1100000/-(ACTUAL SALES VALUE). IN THE REGISTRY THE DLC VALUE (I.E. STAMP DUTY VALUATION, FOR SEC. 50C)OF THE LAND IS 2300000/-. THE ASSESSEE DEPOSITED THE WHOLE CONSIDERATION OF RS. 1100000/- IN CGAS A/C. WITH IN RETURN FILING PERIOD.

NOW, QUESTION ARISES WHETHER IS TO CONSIDER THE DLC AMOUNT FOR CALCULATING CAPITAL GAIN U/S 54F OR NOT. AS THE WHOLE CONSIDERATION RECEIVED IS DEPOSITED IN CGAS A/C.
KINDLY GIVE YOUR SUGESSTION. (WITH DECIDED CASE LAW IF ANY)

Nikhil Kaushik

Nikhil Kaushik (Expert)
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14 January 2014 as per Gouli Mahadevappa v. ITO, 135 TTJ (Bang.) 489 and Mohd. Shoib v. Dy. CIT, 1 ITR (Trib.) 452. it was held the the 50C value is to be used for the 54F too. (bangalore and Lucknow tribunal)

However, in case Gyan Chand Batra v. ITO, 133 TTJ (Jp) 482. (but here the assessee had anyways invested amount more than the 50C value). (this is Jaipur tribunal)

So I would suggest that you atleast go through all the case laws and see which one is more closer to the facts of your case.

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AVTAR SINGH

AVTAR SINGH (Expert)
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14 January 2014 The capital gains arising from the transfer of a capital asset is exempt from tax u/s 54F if the taxpayer has within the stipulated period purchased/constructed a residential house. Where the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ; but if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45.
As per section 50C if the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land/building is less than the stamp duty value, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration received or accruing as a result of such transfer.
Therefore the amount as per the stamp duty value will have to be invested to get exemption u/s 54F.

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