The Raipur bench of the Income Tax Appellate Tribunal (ITAT) held that the value of the property assessed by the stamp valuation authority (SVA) on the date of agreement to sale shall be taken for computing the full value of the consideration for transfer under Section 50C of the Income Tax Act, 1961.
The assessee had filed his return of income declaring an income of Rs.82,84,786/-. The original assessment was framed by the Assessing Officer vide his order passed under Section 143(3) of the Income Tax Act Act determining the assessee’s total income at Rs.82,84,786/-.
It was observed by the Assessing Officer that a mistake had crept in his order passed under Section 143(3) of the Income Tax Act wherein the Long Term Capital Gain (LTCG) that was disclosed by the assessee on the sale of agricultural land at Iskcon, Raipur by adopting sale consideration of Rs.66 lacs as against Fair Market value (FMV) of Rs.78,97,500/- though not in conformity with the provisions of Section 50C of the Income Tax Act was summarily accepted by him while framing the assessment.
The Commissioner of Income Tax (Appeal) [CIT(A)], by referring to the “1st proviso” to Section 50C(1) of the Income Tax Act observed that as the assessee had entered into an “agreement to sell” dated 06.03.2014 and received the entire amount of sale consideration of Rs.66 lacs by cheque before 31.03.2014, therefore, FMV of the agricultural land sold by him was to be determined on the basis of guidelines rate and not those pertaining the year in which registered sale deed was executed by him.
On a perusal of the “agreement to sell” it transpires that the assessee had received part of the sale consideration of Rs. 20 lacs vide cheque drawn on Union Bank of India, Raipur. Also, as is discernible from the copy of the sale deed the balance amount of sale consideration of Rs.46 lacs was received by the assessee in the preceding year.
The Two-member bench comprising of Ravish Sood (Judicial member) and Arun Khodpia (Accountant member) held that neither the “agreement to sell” dated 06.03.2014; nor the contents thereof had been doubted by the Assessing Officer in the course of the remand proceedings, therefore, as observed by the CIT(A), and rightly so, the value assessable by the stamp valuation authority on the date of the “agreement to sell” i.e. 06.03.2014 was to be taken for computing full value of consideration for such transfer under Section 50C of the Income Tax Act.
Accordingly, the bench found no infirmity in the view taken by CIT(A) who had rightly triggered the “1st proviso” to Section 50C(1) of the Income Tax Act, therefore the order of CIT(A) was upheld and the appeal of the revenue was dismissed.
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