Capital gain query

289 views 4 replies

Neeta Parwani

Auditor

46 Points Joined December 2014

I want to know the treatment of capital gain in the following circumstances: Suppose Mr.A is the owner of the shop and gave the shop on rent to Mr. B years back receiving a very minimal amt as rental income. Now he wants the tenant to vacate the shop but the tenant denies for the same. The case went to the court and was won by the tenant. Ultimately, Mr. A transferred the ownership of such shop to Mr. B for Rs. 5,00,000/-. However, the Fair Market Value of such shop was Rs. 50 lakh. What will be the capital gain and what amount will be treated as sale consideration for section 48 of Income Tax Act? Reply asap.

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

209827 Points Joined July 2016

Based on Court judgement, as a special case, Rs. 5 lakhs can be taken as actual settlement value. In case of query, the copy of the court judgement can be submitted for clarification.

Neeta Parwani

Auditor

46 Points Joined December 2014

Sir in case there was not court issues, then in such case section 50C will be applicable? (i.e. deemed value of consideration will be taken for calculation?)

Also can you quote me the case law?

saurabh kumar

Tax Consultant

348 Points Joined July 2016

Yes, if there was no court issue then sec 50(c) is applicable and stamp value of that property on the date of transfer will be taken as sale consideration.For more details you can refer the following case

https://indiankanoon.org/doc/118506233/