Property Purchase below Circle Rate

Tax queries 2943 views 3 replies

KETAN

41 Points Joined August 2008

Hi,

One of my client has brought a property below the circle rate. It is understood that the seller will be charged to capital gains tax at the circle rate even if the sale consideration is below the circle rate. But AO has made an addition in income of my client u/s 69 on account of undisclosed investment saying that one can not buy a property below circle rate. What is the correct position in this matter. Are there any case laws which we can use to counter the claim of the AO?

Anticipating good and healthy discussion.

Thanks in advance

Replies (3)

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

possible remedies are ..........

1) status of stamp duty paid, and if its on circle rate then whether its challaged or not?

2) challange the AO to depute official valuation officer

Guest

ketan

I never thought AO shall do this inspite of the fact that the in the hands of seller section 50C is applicable.

As per section 50C circle rate shall be treated as full value of consideration in the hands of seller.

Sorry to say AO is right in invoking section 69.

What you can do is to prove that your purchase price is the market price. I know it is hard to prove it.

It shall all depend upon the valuation officer. And valutation officer shall be appointed by AO and not the client. Again a difficult situation.

Thanks

https://taxbykk.blogspot.com/

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