Computation of long term capital gains u/s 50C of the IT Act

Last updated: 05 September 2021

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This Income Tax Appellate Tribunal (ITAT) Hyderabad ruling concerns the computation of long-term capital gains under Section 50C of the Income Tax Act. The Assessing Officer (AO) calculated the capital gains based on the Stamp Duty Registration (SRO) value, which was significantly higher than the sale consideration declared by the assessee. The Tribunal allowed the assessee's appeal, following a precedent set in a similar case.

Court :
ITAT Hyderabad

Brief :
Both these appeals filed by the assessee are directed against CIT(A) - 1 , Hyderabad’s separate orders dated 19/05/2017 for AY 2012-13 involving proceedings u/s 143(3) and 271(1)(c) of the Income- Tax Act.

Citation :
ITA No. 1279 & 1280/H/2017

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES “B”: HYDERABAD
(THROUGH VIRTUAL CONFERENCE)
BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER
AND
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
ITA No. 1279 & 1280/H/2017
Assessment Year: 2012-13

Kalawathi Bagayath,
Hyderabad.
PAN – AEQPB 7777K

Asst. Commissioner of Income-tax,
Circle – 4(1), Hyderabad.

Assessee by:
Shri P. Murali Mohana Rao
Revenue by:
Shri Rohit Mujumdar
Date of hearing: 17/06/2021
Date of pronouncement: 30/08/2021

O R D E R

In this appeal the assessee has raised 11 (1 to 11) grounds of appeal and raised additional grounds off appeal from 12 to 17, the sum and substance of which are against the action of the CIT(A) in upholding the computation of long term capital gains u/s 50C of the Act at Rs. 41,04,732/- by the AO.

2. Briefly the facts of the case are that during the course of the assessment proceedings, the Assessing officer noticed that the assessee claimed Long term capital gain of Rs.12,60,561/-. The Assessing Officer noticed that the assessee had showed receipt of Rs .6,68,50,000/- towards sale consideration of the commercial property located at 1-1-152 to 155, admeasuring 2474 Sq. Yards of Land at S.D. Road Secunderabad to M/s. Yasoda Health Services Pvt ltd on 14.11.2011. On verification of the Sale deed, it was noticed that the Fair Market value of the property fixed by the SRO for the purpose of Stamp Duty is Rs.12,37,00,000/- as against Rs.6,68,50,000/- shown by the assessee.

3. Before us, the ld. AR of the assessee submitted that similar issue came up for consideration before the coordinate bench of this Tribunal in the case of Rajitha Dubbaka in ITA No. 1508/Hyd/2017 for AY 2012-13 vide order dated 08/06/2021, a copy of which is placed on record.

4. In the result, both the appeal of the assessee in ITA No. 1279/Hyd/2017 and in ITA No. 1280/Hyd/2017 are allowed.
Pronounced in the open court on 30th August, 2021.

Please find attached the enclosed file for the full judgement

FAQ :

The judgement addresses the computation of long-term capital gains under Section 50C of the Income Tax Act, specifically when the Stamp Duty Registration (SRO) value of a property differs from the sale consideration declared by the seller.

The assessee declared a sale consideration of Rs. 6,68,50,000/-, while the SRO value for stamp duty purposes was Rs. 12,37,00,000/-.

The Assessing Officer upheld the computation of long-term capital gains at Rs. 41,04,732/-, likely based on the higher SRO value.

The Income Tax Appellate Tribunal (ITAT) Hyderabad allowed both appeals filed by the assessee.

The Tribunal allowed the appeal by following a decision from a coordinate bench in a similar case (Rajitha Dubbaka, ITA No. 1508/Hyd/2017).