Property registered in 2002 is a builder floor in Gurgaon with combined first floor and basement. Sold property first floor in year 2006 when as per govt orders independent floor were not regestrable. This sale was done on registered GPA. Then in 2013 the basement was sold to same party as the first floor because independent basements were not allowed for registration. However First floor & basements could be registered. So the buyer registered combined first floor (bought in 2006) & basement bought in 2013. Case came up in scrutiny ITO has raised demand on combined registration value based on circle rates of 2013. I had calculated basement separately as 25% of the original cost of acquisition and actual sale price. As at sale time neither F Floor nor Basement was registerable. Twice the matter has been sent to Valuation officer and both times original ITO demand has been upheld with no relief. How to defend the case.
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Dear Client,
If the parties presenting the conveyance deed of basements of residential properties for registration, stated that the amount they were paying was lower than the circle rates, the registration officer if not satisfied would have to refer it to the collector, and the parties would have to convince the collector that the valuation was correct. The collector would then have to determine the value of the basement and assess the amount of duty payable.
You can try the remedy of writ petition for directions to the said authorities
File appeal against the order in Income tax appellate tribunal. Date of agreement of sale is considered . Circle Value as on that date is relevant for income tax purposes.
You can prefer an appeal against the orders of the ITO by producing the documentary evidences before the appellate authority, i.e., the appellate tribunal.
In my opinion, if the property could not be registered and then it was subsequently registered then the computation of capital gains may be made based on the latest transaction , you may clarify the same in the appeal.
You should produce the sale deed with original value of property on which you have registered the property on your name.
