Query No. 1
The vacant plot was purchased five years back, which is sold at ₹ 60,00,000/-, but Stamp Duty value is ₹ 1,30,00,000/- what assessee should do?
Section 50C provides that where consideration received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed by any authority of a State Government for the purpose of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration, and the capital gains shall be computed accordingly under section 48 of the Act.
It further provides that where the assessee claims that the value adopted or assessed for stamp duty purposes exceeds the fair value of the property as on the date of transfer, he may dispute the value so adopted or assessed in any appeal or revision or reference before any authority or court. If he has not disputed before any authority or court, he may request the Assessing Officer to refer the matter to a Valuation Officer in accordance with section 55A of the Act.
If fair value determined by the Valuation Officer is less than the value adopted for Stamp Duty purposes, the Assessing Officer may take such fair market value to be the full value of consideration. However, if the fair market value determined by the Valuation Officer is more than the value adopted or assessed for the Stamp Duty purposes, the Assessing Officer shall not adopt such fair market value and shall take the full value of consideration to be value adopted or assessed for Stamp Duty purposes.
Query No. 2
Whether the Assessing Officer is justified in making addition of difference between Stamp Duty value and purchase price of agricultural land under section 56(2)(vii) of the Act?
This section is opposite of section 50C of the Act. Section 50C is applicable to seller of land or building or both, while this section is applicable to the purchaser of land or building or both.
As per the querist, he has purchased agricultural land which is not a capital asset as per section 2(14)(iii) of the Act. Hence, there is no question of making addition in respect of difference between Stamp Duty value and purchase price, though section covers land or building or both.
Query No. 3
Whether Assessing Officer is justified in treating excess stock found as undisclosed investment under section 69 of the Act?
Yes, as per the Bombay High Court in Ramanlal Kacharulal Tejmal [146 ITR 368] excess stock found represents investment of the assessee in property and therefore same can be assessed under section 69 of the Act.
Similar view has been taken by the Gujarat High Court in Fakir Mohmed Haji Hasan v. CIT [246 ITR 290]
and Punjab & Haryana High Court in B. T. Steel Ltd. v. CIT [328 ITR 471].
Query No. 4
Whether self acquired property of father or grandfather after coming into force Hindu Succession Act be treated as Joint Hindu Family?
In view of the Hindu Succession Act, 1956, the separate property of the father inherited upon intestacy by the son is to treated as son’s separate property and not as the property of his joint family.
The property of a Hindu dying intestate after the coming into force of the Hindu Succession Act, 1956, will devolve on his heirs in accordance with section 7 of the Hindu Succession Act and the successor will inherit the property in their individual capacity and not as representing their own Hindu Undivided Family. The Supreme Court, in
CWT v. Chander Sen, [161 ITR 370 (SC)] has held that if there is no coparcenary subsisting between a Hindu and his sons at the time of death of his father, property received by him on his father’s death cannot be blended with the property which had been allotted to his sons on a partition effected prior to the death of the father.
In Chander Sen’s case (supra), the Supreme Court had approved the view taken by the Madras High Court in
Addl. CIT v. Karuppan Chettiar [114 ITR 523]. This principle was also followed in
State of Tamil Nadu v. Ganesa Odayar [227 ITR 544 (Mad.)(FB)].
Query No. 5
Whether cash aggregating to rupees two lakh or more can be received by a bank after insertion of Section 269ST under the Income-tax Act?
Yes. Section 269ST reads as under:
“No person shall receive an amount of two lakh rupees or more –
(a) In aggregate from a person in a day; or
(b) In respect of a single transaction; or
(c) In respect of transactions relating to one event or occasion from a person,
otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:
Provided that the provisions of this section shall not apply to–
(i) Any receipt by–
(b) Any banking company, post office savings bank or co-operative bank;
(ii) Transactions of the nature referred to in section 269SS;
(iii) Such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.
Explanation.– For the purposes of this section,–
(a) “Banking company” shall have the same meaning as assigned to it in clause (i) of the Explanation to section 269SS;
(b) “Co-operative bank” shall have the same meaning as assigned to it in clause (ii) of the Explanation to section 269SS.”
So, a person can deposit / make payment otherwise than by account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account to any Government, Banking Company, Post office Saving Bank or co-operative bank.
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