Tribunal rules in favor of assessee on section 50C property transfer dispute

The Tribunal upheld the ld. CIT (A)'s decision favoring the assessee in an appeal regarding the deletion of an addition under section 50C of the Act for the assessment year 2006-07. The Tribunal determined that as the property transfer was through an unregistered agreement to sale, section 50C did not apply, and the amendment to section 50C was not retrospective. Consequently, the department's appeal was dismissed, affirming the ld. CIT (A)'s decision in favor of the assessee.

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Issues involved: Appeal by department against order of ld. CIT (A) relating to assessment year 2006-07 regarding deletion of addition u/s 50C of the Act.

Summary:
The department objected to the deletion of addition made by the Assessing Officer (AO) by applying provisions of section 50C of the Act. The AO computed capital gain at Rs. 26,36,153/- but adopted deemed full value of consideration at Rs. 30,63,132/- u/s 50C. The appellant contended that since the transfer was through an unregistered agreement to sale, the question of valuation of stamp duty did not arise, making section 50C inapplicable. The appellant relied on legal precedents to support their argument. The ld. CIT (A) considered the appellant's contention and found that section 50C is a special provision for adopting full value of consideration in certain cases where stamp valuation authority assesses the value for stamp duty payment. The ld. CIT (A) allowed the appeal of the assessee on this issue, stating that the amendment to section 50C, effective from 1.10.2009, inserting the word "assessable," is not retrospective and cannot be applied to cases before that date where the property was not registered.

The department appealed to the Tribunal, with the ld. D/R relying on the AO's order and the ld. Counsel of the assessee supporting the ld. CIT (A)'s decision. The Tribunal found that the ld. CIT (A) was justified in allowing the issue in favor of the assessee, citing the decision of ITAT Jodhpur in a similar case. As there was no stamp duty imposed due to the unregistered sale deed, and the amendment to section 50C was not applicable for the assessment year 2006-07, the Tribunal confirmed the ld. CIT (A)'s decision in favor of the assessee. Consequently, the appeal of the department was dismissed, and the order was pronounced on 05.08.2011.

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