| COURT: | ITAT Hyderabad |
| CORAM: | B. Ramakotiah (AM), P. Madhavi Devi (JM) |
| SECTION(S): | 50C, 54F |
| GENRE: | Domestic Tax |
| CATCH WORDS: | capital gains, exempt income, exemption |
| COUNSEL: | K. C. Devdas |
| DATE: | May 13, 2016 (Date of pronouncement) |
| DATE: | May 16, 2016 (Date of publication) |
| AY: | 2010-11 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 50C/ 54F: In allowing exemption u/s 54F, the deemed consideration u/s 50C has to be taken into consideration and it cannot be restricted to the consideration mentioned in the sale deed | |
The ultimate object and purpose of section 50C of the I.T. Act is to see that the undisclosed income of capital gains received by the assessee should be taxed and that the law should not encourage and permit the assessee to peg down the market value at their whims and fancy to avoid tax, but when the capital gain is assessed on notional basis, whatever amount is invested in the new residential house within the prescribed period under section 54 of the I.T. Act, the entire amount invested, should get benefit of deduction irrespective of the fact that the funds from other sources are utilised for new residential house.
(1) Raj Babbar vs. ITO (2013) 56 SOT 1 (ITAT) (Mum)
(2) Gouli Mahadevappa vs. ITO (2013) 356 ITR 90 (Kar)
The summery of the case referred and the judgement not matched. As per judgement ITAT upheld order of CIT(A) who deleted the addition made by AO on the basis that 54F exemption should be computed considering 50C value.
Hence decision of the ITAT is that for determining exemption u/s 54F actual sale consideration and not deemed sale consideration should be taken into account.