INCOME TAX ACT, 1961

Section 50C

Capital gains - Applicability of section 50C - Date of agreement fixing the amount of consideration and date of registration of property being capital asset was different - AO assessed valuation on the basis of stamp duty value as on date of registration

Assessee sold immovable property on 20-4-2010 in the capacity of constituted attorney on the basis of agreement entered into by and between original owners (seven in numbers) on 21-12-1996 with father of assessee for a consideration of Rs. 2,37,500 was also paid on date of agreement. Subsequently on 11-10-2010, property was registered in favour of assessee's father, on the date of registration on 11-10-2010 value of consideration was decided at Rs. 3,00,000. The stamp duty paid was of Rs. 2,53,000. On the other hand, in terms of stamp duty valuation, value of the land was determined at Rs. 51,63,265. AO adopted the value of sale consideration at Rs. 51,62,265 and thus made addition of balance amount. Assessee's case was that stamp duty valuation on the date of agreement to sale was required to be considered while determining consideration as per deeming fiction under section 50C. Held: When date of agreement fixing the amount of consideration and date of registration of property being capital asset was different matter should have been referred to DVO by AO for determination of valuation as on date of agreement keeping in view the provision of section 50C instead of that revenue assessed valuation of property on the basis of valuation so assessed by Stamp duty Authority and difference amount had been added to the total income of assessee which was not permissible in law. Therefore, addition could not be sustained.

Followed:Amitkumar Ambalal (HUF) v. Asstt. CIT ITA No. 3353/Ahd/2014 for assessment year 2009-10.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

SUBSCRIBE FOR FULL CONTENT