The Income Tax Appellate Tribunal (ITAT), Rajkot bench has held that the property transferred in the name of mother for a nominal consideration of Rs. 5 lakhs cannot be treated as a “gift” as the same is taxable as “capital gain” under section 45 of the Income Tax Act, 1961.
Ms. Suchitra Kamble, Judicial Member and Shri Waseem Ahmed, Accountant Member observed that the property was transferred by the assessee to his mother by way of sale deed wherein the consideration on the transfer of the property in dispute was duly recorded.
“There was nothing mention in the sale deed justifying the stand of the assessee i.e. the transfer was in the nature of the gift or without consideration. Accordingly, we hold that there was a valid transfer of the property in the given facts and circumstances within the meaning of the provisions of section 45 of the Act,” the ITAT said.
Concluding the order, the ITAT referring the matter to the DVO, held that “From the above, there remain no ambiguity that the impugned property transferred by the assessee to his mother for consideration of Rs. 5 Lakh is liable to be brought under the ambit of capital gain. However, the question arise for determination of sales consideration. As the AO has taken consideration as per section 50C of the Act whereas the AR before us has challenged the value adopted by the AO and subsequently sustained by the learned CIT(A). In the interest of justice and fair play, we set aside the issue to the file of the AO to refer the matter to the DVO to determine the value of the property in pursuance to the provisions of section 50C of the Act. Hence the ground of appeal of the assessee is partly allowed.”
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