No S. 50C Addition When Sale Price Exceeds Stamp Value: ITAT Deletes Addition Caused by Typographical Error in Dept Records [Read Order]

In a recent rulling the Income Tax Appellate Tribunal (ITAT) Surat bench deleted ₹19 Lakh Addition after finding that the Assessing Officer had relied on incorrect departmental records arising from a typographical error in the cost of the property as per the departmental information.

The tribunal held that no addition can be made under Section 50C if its declared sale price exceeds the stamp valuation.

The appeal was filed by Rupal Nirav Shah against the order passed by the Commissioner of Income Tax (Appeal), confirming an addition of ₹19.21 lakh for the Assessment Year 2018-19.

The assessee, Rupal Nirav Shah, explained before the AO that the sale consideration was based on the jantri value of the residential building, and that the document was registered without any demand for additional stamp duty.

On the other hand, relying on erroneous information obtained from departmental records, the Assessing Officer assumed the stamp valuation of the property to be ₹1.82 crore and invoked Section 50C to make an addition.

The assessee had filed her return of income for the year under consideration, declaring the total income of ₹67.52 lakh and jointly sold an immovable property with her husband for ₹1.44 cr.

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The respondent, Assessing Officer (AO), relying on departmental information obtained from the sub-register, alleged that the stamp valuation of the property was ₹1.82 cr and invoked Section 50C to adopt the higher value, resulting in an addition of ₹19.21 lakh to the assessee’s income.

The tribunal observed that the Assessing Officer made the addition because of a typing mistake in the property cost shown in the department’s records. It also observed that the Sub-Registrar valued the property at ₹1.36 crore, while the actual sale price was ₹1.44 crore and stamp duty was paid on the higher sale value. Therefore, there was no reason to make the addition.

The bench comprising Suchitra Kamble (Judicial Member ) and B.R.R Kumar ( Vice President ) held that the sale price is not lower than the official valuation, no addition was warrante,d and the appeal of assesee is allowed

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