Only Final Stamp Valuation Determined by Collector Applies u/s 50C: ITAT allows Full Section 54F Exemption [Read Order]
The Tribunal noted that in the co‑owner’s case (Naresh Shrivastava), relief had already been granted on identical facts, and therefore parity required the same treatment here.
![Only Final Stamp Valuation Determined by Collector Applies u/s 50C: ITAT allows Full Section 54F Exemption [Read Order]](https://images.taxscan.in/h-upload/2026/02/06/2124059-only-final-stamp-valuation-determined-collector-applies-taxscan.webp "Only Final Stamp Valuation Determined by Collector Applies u/s 50C: ITAT allows Full Section 54F Exemption [Read Order]")
In a recent ruling, Income Tax Appellate Tribunal (ITAT), Raipur, held that only the final stamp valuation fixed by the Collector applies under Section 50C of the Income Tax Act, 1961. It deleted a ₹74.5 lakh capital gains addition and held that Section 54F exemption must be based on actual sale proceeds reinvested, not deemed values. The appeal arises from an assessment...
In a recent ruling, Income Tax Appellate Tribunal (ITAT), Raipur, held that only the final stamp valuation fixed by the Collector applies under Section 50C of the Income Tax Act, 1961. It deleted a ₹74.5 lakh capital gains addition and held that Section 54F exemption must be based on actual sale proceeds reinvested, not deemed values.
The appeal arises from an assessment order dated 29.03.2016, passed under section 147 read with section 143(3) for the assessment year 2008-09. The order had adopted the stamp duty valuation of ₹5.75 crore instead of the actual sale consideration of ₹1.30 crore for land situated at Labhandi, Raipur, resulting in the disputed addition.
The petitioner, Mahesh Shrivastava, argued that his ⅙ th share of ₹21.75 lakh was fully reinvested in a residential house, entitling him to complete exemption under Section 54F.
Also, the Collector of Stamps, Raipur, after prolonged litigation and pursuant to directions of the Chhattisgarh High Court, had finally determined the property’s value at ₹1.60 crore on 30 September 2021. This valuation, the petitioner submitted, had attained finality and was already accepted in the identical case of his brother, where ITAT Raipur had granted relief 2024.
The revenue, argued the case vehemently and prayed for dismissal of the appeal.
The tribunal, after hearing both sides, noted that the deeming fiction under Section 50C could not be stretched to deny exemption under Section 54F. It alsoobserved that law cannot compel a taxpayer to invest more than the actual consideration received, citing the maxim “lex non cogit ad impossibilia” which means that the law cannot possibly compel a person to do something which is impossible to perform.
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The tribunal also held that where the assessee claims exemption under section 54F of the Act, the net consideration when deployed in the acquisition or construction of a residential house, it should be eligible for exemption, and the provisions of section 50C should not be imported for such computation.
The Tribunal ruled that the stamp duty value adopted under Section 50C can only be used for computing capital gains, and cannot be treated as the actual net consideration of the property for purposes like Section 54F exemption.
The bench of Partha Sarathi Chaudhury ( judicial member), Avdhesh Kumar ( account member) directed the Assessing Officer to grant full exemption under Section 54F since the cost of the new residential asset was not less than the net sale consideration.
Accordingly, the assessee’s appeal was allowed in full.Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
