ITO vs. Haresh Chand Agarwal HUF (ITAT Agra)

DATE: (Date of pronouncement)
DATE: January 20, 2014 (Date of publication)

Click here to download the judgement (harish_chand_50C_147.pdf)

S. 147: Failure to compute capital gains u/s 50C does not lead to escapement of income

The assessee sold property for Rs.6 lakh and offered capital gains on that basis. The AO accepted the claim without examining the applicability of s. 50C. He later (within 4 years from the end of the AY) reopened the assessment on the basis that the stamp duty valuation was Rs. 25 lakhs and the capital gains had to computed on that basis u/s 50C. The assessee challenged the reopening inter alia on the ground that the failure to apply s. 50C did not mean income had escaped assessment. The CIT(A) accepted the plea. On appeal by the department to the Tribunal HELD dismissing the appeal:

S. 50C is not a final determination to prove that it is a case of escapement of income. The report of the approved valuer may give estimated figure on the basis of facts of each case. Therefore, mere applicability of s. 50C would not disclose any escapement of income in the facts and circumstances of the case. The AO at the original assessment stage considered all the documents and material produced before him and has accepted the cost of property as was declared by the assessee. The reassessment is on change of opinion which is not justified

Note: On the question whether failure to voluntarily apply s. 50C attracts s. 271(1)(c) penalty see Madan Theatres (Cal HC), Renu Hingorani (ITAT Mum) & Chimanlal Manilal Patel (ITAT Ahd)
3 comments on “ITO vs. Haresh Chand Agarwal HUF (ITAT Agra)
  1. Limitation prescription is a natural justice doctrine, how Revenue can cross over! it is like real estate agents charge 2 months rent when any one gets a room/flat on rent for 11 months when a maximum single lease can be 33 months. that way real estate agents take to illegal gains.Agency commission comes on the principle of highest lease period prescription, that is Natural justice, else every such income is indeed illegal. in advanced countries the agents are legally operate but in india otherwise. So it seems Revenue seems to use meaningless sections of income tax Act 1961, which in fact need to be duly modified, so that assessees are not harassed is my view

  2. Law is an unruly horse if not duly bridled by Natural justice doctrines. so Natural justice is a common law principle.
    No natural resources can be charged for the natural resource but you can get only a service charge as you supply the same. supply service charge cannot be huge at all that is natural justice that is seen in common we call law is an unruly horse!

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