Sir my client purchase immovable property below than circle rate hence he got notice from income tax department u/s 56. Is there any case law which is in favour of assesse related with this matter. kindly guide me.
The law relating to the buying property at less than circle rate and its tax effect on buyer is very recent. I believe there wont be much cases on that by now. You can however fight the case by showing that the valuation is genuinely low by taking valuation.
Dear Sir,
Hope you are doing well !!
We have handled such cases before.
We may assist you for further action.
It is advisable to take a phone consultation for detailed discussion.
Hello,
The argument can be made upon the lower valuation of the property justified by a valuation report. The valuation might also be referred to DVO in such case.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
Hi
The AO is correct on issuing notice for this case. However, if the market value of the property was actually low, the AO me refer it to a valuation officer.
We may assist you with finding case laws on the same on assignment basis.
Hello Sir,
The AO is correct on issuing notice for low valuation of property
However, there are few cases in favour of assesse related with this matter.
There is no such case law.
In this case each case needs to be dealth in separate manner.
You need to get your valuation report and if the difference is huge you need to have sufficient points of why that circle rate should not be used.
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Thank you
No Sir. Section 56 is clearly applicable and the Tax needs to be paid.
