The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT)held that the sale value of a property should be considered as of the agreement date under Section 50C of the Income Tax Act, 1961.
Devindraben Rajeshbhai Sharma,appellant-assessee,disposed of an immovable property located at Danteshwar Moje Gam Bopad, RS No. 923, TP Scheme No. 4, Final Plot Nos. 384 and 385, Yamuna Co-op. Housing Society Ltd., for ₹42,00,000. No income tax return was submitted for the assessment year in question. The Stamp Valuation Authority determined the property’s value at ₹42,00,000, triggering the applicability of Section 50C of the Act.
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The two member bench comprising Dr.BRR Kumar(Vice President) and Suchitra Kamble(Judicial Member) reviewed the submissions from both parties and examined the material on record, highlighting the key facts of the case. The assessee had entered into a Banakhat (agreement to sell) on 24/08/2010, which was inventorized on 25/08/2010, with an advance payment of ₹1 lakh. A sale deed for the residential property was later executed on 25/11/2011 for ₹42,00,000. The Revenue applied Section 50C of the Act, using the date of registration of the sale deed, i.e., 25/11/2011, as the basis.
Section 50C provides that if the sale consideration is lower than the value determined by the Stamp Valuation Authority, the latter is deemed to be the full value of consideration for calculating capital gains under Section 48. However, the first proviso to Section 50C permits the adoption of the stamp valuation as of the agreement date if the dates of agreement and registration differ, provided part or full consideration was received through prescribed banking channels on or before the agreement date.
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The appellate tribunal, agreeing that the agreement date of 25/08/2010 was not in dispute, decided that the sale value should be based on that date, as per Section 50C of the Act. Therefore, the tribunal set aside the order of the CIT(A) and allowed the assessee’s appeal.
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