Is sale of inherited agri land to own sister fall under cg?

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kanagaraj (Querist)

15 December 2014 Dear, 15.12.2014
My client Mr X resident individual is an agriculturist. A.Y 2007-08. he has only income from agri.around 1 lac p.a. He has sold inherited urban agri land to his sister via sale deed instead of family partition settlement deed due to some financial arrangement and personal purposes. Now notice isssued by A.O. U/S 50C. What to do? background as follows:
Mr. X's mother purchase urban agri land : cost Rs. 10000/- 19.05.1970 5 acre
Mr. X become the owner via "WILL DEED" 14.07.1995 5 acre
Mr. X's Mother dead on 18.07.2002
Mr X sold part of land to his own sister 26.05.2006 25 cent
as per sale deed mentioned consideration of Rs.4 lac cash settlement but as per stamp duty/state authority –valuation is Rs.15 lacs.
A.O. issued notice u/s 50C. In this situation guide me. (i) Can I stand it is not a transfer as per capital gain purpose u/s 46, 47 of IT Act? or Any other suitable suggestions are welcome.
advance thanks
with regards
s. kanagaraj

Rupesh Jain

Rupesh Jain (Expert)

15 December 2014 it is better then brother gift the land to his sister not the sale of land.

now you have to face the income tax deptt.

if you have not mention the land area in deed then you have gift deed, pls check for the part of sister then no capital gain will arise.