Capital gain

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Jivan (Querist)
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10 October 2011 Dear Expertji,
My client is a salaried employee. In AY 2010-11 He filed his return of income showing Income from Salary and other sources.
In the said assessment year He sold Ancestral Plot of land jointly owned by his family. There are 7 beneficiary in the property. Total sale consideration of the property was Rs. 60 lakhs. He received Rs.100000/- as his share as reflected in Sale Deed. Govt Valuation of the Property was Rs.1.28 Cr.
Now he has received notice for assessment, hence how to pay tax on the above transaction. Is there any other consequences for not showing this transaction in the IT Return? How to present the case?

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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10 October 2011 As per section 50C it is the stamp value that is taken as consideration and capital gain is computed accordingly.
Now u can claim before AO that due to factors like joint family property , family dispute etc the property was sold for lower value and ask for reference to DVO under section 50C(2)
Explain these circumstances to DVO and try to get the DVO valuation as near as possible to your value of 60L

CA MANOJ GUPTA
JODHPUR
09828510543

sumit jain

sumit jain (Expert)
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10 October 2011 Here's a tip for you..

If you can prove to the satisfaction of the AO that the sale of property and subsequent distribution of sale proceed was to settle continuous friction (dispute) and to bring peace among family member, hence would not be considered as transfer. Therefore, no capital gain will arise.

CIT v. A.L.Ramanathan(2000) Madras HC

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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11 October 2011 The facts of the A L Ramanathan case are totally different and will not apply to the case here
In that case the properties were transfered among family memebers pursuant to a family arrangement

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