ACIT v. Santosh Kumar Garg
Decision: In assessee’s favour
Capital gains–Applicability of section 50C– Transfer of property through transfer of shares in the company
Search was conduct on assessee and during the course of the search, a “share purchase agreement” is to be find. On perusing the same AO opined that the transfer of shares was merely the mode or the vehicle to transfer the land and therefore he made addition by invoking section 50C using fair market value of the land as sale consideration. Assessee’s contention was that he was only a shareholder and not the owner of the property which was own by the company. Therefore, it could not be said that he had transferred the land.
The sale consideration account by the assessee was same as that was mention in the say agreement. There was no evidences about any extra-amount changing hands. As for invoking section 50C using fair market value of the land as sale consideration, it could be invok only if the sale consideration receive that is less than the value adopted by Stamp Valuation Authority. However, there was no evidence that any stamp duty has to be pay towards transfer of the plot of land.