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INCOME TAX OFFICER vs. SMT. SUSHMA GUPTA ITAT, DELHI C BENCH
October, 17th 2011
Also Smt. Sushma Gupta vs. ITO (C.O. No. 103/Del/2008; Asst. yr. 2003-04)
NoticeServiceValidityAO issued notice under s. 143(2) at the address mentioned by
the assessee in the return of income and since the assessee was found not traceable at
the address given, notice was served by affixtureNotice is validly served as AO is
expected only to serve notice on the address given in the return of income as the
assessment proceedings, if initiated, are to be initiated only at the address given in the
return of income unless it is shown that any application for change of address later on
was filed
Conclusion :
Service of notice by affixture at the address given by the assessee in the return of income is valid
as the AO is expected to serve the notice only at the address given in the return of income unless
the application for change in address is filed.
In favour of :
Revenue
Capital gainsSale of agricultural land purchased through power of attorneyAssessee
contending that land did not belong to herAs assessee herself declared profit on sale of
land as business income and provisions of s. 2 (47)(v) were applicable, profit was
chargeable to tax as capital gainSec. 50C was applicable and the value adopted or
assessed for the purpose of stamp valuation shall be deemed to be the full value of the
consideration receivedCIT(A) was not justified in holding that s. 50C did not apply as
CTR Page 1 of 11
assessee was not direct ownerHowever as the assessee has agitated the addition, the
issue is restored to the file of AO for providing the opportunity to show that the value
adopted or assessed by stamp valuation authority exceeded the fair market value of the
property as on the date of the transfer and if the assessee raises objection the AO is
directed to refer the issue to the Valuation Officer and after adopting such procedure
assess capital gain in accordance with the law
Held :

If a capital asset is transferred on which the capital gain is liable to be assessed, then, according to
s. 50C(1), the value adopted or assessed for the purpose of stamp valuation shall be deemed to be
the full value of the consideration received. It nowhere states that the assessee should be directly
the owner. Moreover, the transaction has been owned by the assessee and it has been so returned
by her in the IT return. Therefore, now the assessee cannot plead that she was not the owner and
she did not transfer the said land and, therefore, no capital gain was assessable in her hands. If
the asset transferred is a capital asset, then, she is liable for capital gain which is to be computed
in accordance with the provisions of the Act. However, if the assessee claims that the value
adopted for stamp valuation exceeds, the fair market value of the property as on the date of
transfer or the value so adopted or assessed by the stamp valuation authority is disputed in any
appeal or revision or no reference has been made by other authority, Court or the High Court, etc.,
the AO may refer the valuation of the capital asset to the Valuation Officer. Therefore, if the
assessee claims that the value adopted for stamp valuation purposes is in excess of fair market
value of the property, then, he may request the AO for the valuation of the said land from the
valuation officer and the procedure laid down in s. 50C is Required to be adopted. The case of the
assessee falls within the purview of s. 50C as the consideration received by the assessee as a
result of transfer of the said land is less than the value adopted or assessed by the stamp valuation
authority.
(Para 31)
However, keeping in view that assessee has agitated such addition, the assessee may be provided
with the opportunity to show that the value adopted or assessed by stamp valuation authority
exceeded the fair market value of the property as on the date of the transfer. Therefore, to provide
with such an opportunity this issue is restored to the file of AO and if the assessee raise objection
to this extent, then, refer the issue to the Valuation Officer and after adopting such procedure he
will assess his capital gain in accordance with the law.
(Para 37)
Conclusion :
Profit on transaction of land purchased and sold by the assessee through holder of power of
attorney was liable to be taxed as capital gain; as the consideration received by the assessee as a
result of transfer of the land is less than the value adopted or assessed by the stamp valuation
authority; s. 50C was applicable; CIT(A) was not justified in holding that s. 50C did not apply as
assessee was not the direct owner of land.
In favour of :
Revenue
Case referred to
CIT vs. Chandni Bhuchar (2010) 229 CTR (P&H) 190 : (2010) 34 DTR (P&H) 137 : (2010) 323 ITR
CTR Page 2 of 11
510 (P&H)
Counsel appeared :
Sanjay Awasthi, for the Revenue : O.P. Sapra, for the Assessee
 
 
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