Stamp Value will be considered as Full Consideration only If Payment was made through Bank on or before the Date of Transfer: ITAT

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has observed that the stamp value on the date of agreement to sell shall be considered as full value of consideration for the purpose of section 50C of the Income Tax Act, 1961 only if the amount of consideration or part of such consideration was received by the assessee through banking channel on or before the date of agreement for transfer.

The assessee, an individual engaged in the business of sale of construction material and labour contract, had sold an immovable property worth Rs.77,29,177/- along with his brother. The consideration was received in F.Y. 2007-08 & 2008- 09. The valuation of the property as per stamp valuation authority was Rs.4,63,79,591/-. The Assessing Officer applied sec 50C of the Act. The difference between the consideration received and the stamp valuation authority, the value was Rs.3,86,50,414/-. As the assessee was the owner of half portion of the property, half of the amount i.e. Rs.3,86,50,414/2 was added to the income of the assessee.

Before the Tribunal, the assessee contended that the issue has been held in favour of the assessee by the Tribunal in a case relating to a different assessment year.

While perusing the order, the Tribunal remanded the matter back to the assessee and observed that “it is evident that the benefit of the first proviso would be allowed only if the condition as stipulated in the second proviso is satisfied. In other words, the stamp value on the date of agreement to sell shall be considered as the full value of consideration only if the amount of consideration or part of such consideration was received by the assessee through the banking channel on or before the date of agreement for transfer. This issue, therefore, needs detailed factual verification.”