Stamp Duty Value for Capital Gains Must Reflect Sale Agreement Date, Not Sale Deed Date, Says ITAT.

The ITAT ruled in favor of the assessee, determining that the Stamp Duty Value for capital gains calculation under Section 50C should be based on the date of the sale agreement rather than the sale deed date. This decision was influenced by evidence of advance payment through cheques and aligned with previous tribunal precedents. Consequently, both appeals were partly allowed, emphasizing the significance of the sale agreement date in capital gain assessments. Other grounds were not pressed and hence rejected.

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Issues:
Capital gain calculation based on Section 50C - Date of sale agreement vs. date of sale deed.

Analysis:
The judgment involves two connected assesses, a mother and son, joint owners of a property with disputed capital gains from its sale. The appeals challenge CIT(A) orders dated 07.12.2018 for the mother and 05.01.2016 for the son. The key argument revolves around applying Section 50C of the Act using the circle rate on the date of the sale agreement (07.08.1995) rather than the date of the sale deed (30.08.2008) as done by the Assessing Officer (AO).

During the hearing, the assessee's representative referred to tribunal orders in similar cases and highlighted the importance of the date of the sale agreement in determining the applicability of Section 50C. Citing precedents like Bharathi Dev Anandani vs. ACIT and M/s Universal Power Transformer Pvt. Ltd. Vs. DCIT, it was argued that if the sale consideration was received by the seller before the sale deed date through account payee cheques, the provisions of section 50C should be applied based on the sale agreement date. The evidence of part sales consideration received through cheques before the sale deed date was presented, eliminating the need for remand to the AO.

The Tribunal found no dispute regarding the sale agreement date (12.08.1995) and the advance amount received, aligning with the facts noted by CIT(A) in the son's case. Relying on the tribunal orders cited by the assessee's representative and the evidence of advance payment through cheques before the sale deed date, the Tribunal ruled in favor of the assessee. It held that the Stamp Duty Value as on the date of the sale agreement should be used to calculate capital gains under Section 50C, contrary to the AO's approach based on the sale deed date. As no arguments were presented on other grounds, they were considered not pressed and rejected accordingly.

In conclusion, both appeals were partly allowed based on the above analysis, emphasizing the importance of the sale agreement date in determining the Stamp Duty Value for capital gain calculation under Section 50C.

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