| The Tax Publishers2020 TaxPub(DT) 3618 (Visakhapatnam-Trib) INCOME TAX ACT, 1961
Section 50C
Where stamp duty value of property was less than sale consideration agreed to be paid between the parties, although, stamp duty value of the property was changed as on date of sale deed, for the purpose of determination of deemed consideration under section 50C, stamp duty value of property as on the date of execution of agreement to sale should be adopted, therefore, AO erred in adopting value of the property as on the date of sale deed to determine deemed consideration under section 50C and accordingly, matter was remanded back to AO for fresh adjudication.
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Capital gains - Market value of property sold under section 50C - Computation of -
Assessee had sold an immovable property. AO found that SRO value of the said property was higher than the sale consideration, hence asked assessee to explain as to why the difference amount should not be brought to tax as per section 50C. Assessee filed an explanation stating that he had received the advance from Mr. R by way of cheque and agreement was entered with the prospective buyer for sale of the property, therefore, argued that value of property for purpose of capital gains required to be taken as per the date of sale agreement, but not as on the date of sale deed. However, AO did not accept the contention of assessee, since the sale deed does not contain the details of payments and mention of sale agreement in the sale deed. Hence, rejected the contention of assessee and held that capital gains required to be assessed adopting the SRO value as per sale deed. Held: Assessee had entered into a sale agreement and as on that date, the stamp duty value of the property was less than sale consideration agreed to be paid between the parties. Although, stamp duty value of the property was changed as on the date of sale deed, for purpose of determination of deemed consideration under section 50C, stamp duty value of the property as on the date of execution of agreement to sale should be adopted. Therefore, AO erred in adopting value of the property as on the date of sale deed to determine deemed consideration under section 50C. From the agreement, it was observed that payment was received by assessee by cheque for transfer of land, therefore, case was squarely covered by proviso to section 50C. Thus, matter was remanded back to AO for limited purpose of verification of SRO value as on the date of sale agreement for determination of the capital gains.
Followed:A.V.V.N. Prasada Reddy v. Government of Andhra Pradesh [Writ Petition No. 2679 of 2007, dt. 13-2-2007], Chalasani Naga Ratna Kumari v. ITO [I.T.A. No. 639/Viz/2013 dated 23-12-2016] : 2017 TaxPub(DT) 0075 (Visakhapatnam-Trib), Dharamshibhai Sonani v. ACIT [ITA No. 1237/Ahd/2013 dated 30-9-2016]
REFERRED :
FAVOUR : Matter remanded
A.Y. : 2007-08
IN THE ITAT, VISAKHAPATNAM BENCH
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