ITAT Orders Fresh Adjudication Considering Stamp Duty Valuation Date in Section 50C Application.

The ITAT remitted the case back to the AO for fresh adjudication, directing the AO to consider the stamp duty valuation as on the date of the agreement to sell (04.07.2007) for applying Section 50C. The tribunal deemed the amendment to Section 50C as retrospective from 1st April 2003, aligning with prior judgments. The appeal was allowed for statistical purposes.

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Issues Involved:
1. Validity of the order passed under section 250 on 14.10.2014.
2. Applicability and correctness of Section 50C in determining Long Term Capital Gain.
3. Consideration of the sale agreement and actual sale transaction dates in applying Section 50C.

Detailed Analysis:

1. Validity of the Order Passed Under Section 250:
The appellant challenged the correctness of the order dated 14th October 2014 passed by the CIT(A)-XVI, Ahmedabad, arguing that it was erroneous, did not properly consider the facts on record, and was against the principles of justice. The tribunal did not specifically address the validity of the order under section 250 but focused on the application of Section 50C.

2. Applicability and Correctness of Section 50C:
The appellant contended that the Long Term Capital Gain of Rs. 41,78,564/- was incorrectly considered under Section 50C by taking the value of Rs. 1,48,05,950/- as per the valuation by the registering authority instead of the actual sale consideration of Rs. 1,05,00,000/-. The tribunal noted that the provisions of Section 50C were not properly applied as the relevant date for ascertaining the sale consideration should be the date on which the agreement to sell was entered into, not the date of the transaction.

3. Consideration of Sale Agreement and Actual Sale Transaction Dates:
The appellant argued that:
- The agreement to sell the property was made on 04.07.2007.
- 95% of the sale price was received in F.Y.2007-08.
- Possession was handed over as per agreement on 30.01.2009.
- The sale deed was executed and registered on 24.09.2009.
- The valuation report dated 04.06.2007 was not considered.
- The Assistant Commissioner of Income Tax did not refer the valuation to the department valuation officer.

The tribunal referenced its decision in the case of Amitkumar Ambalal (HUF) vs. ACIT, where it was held that the stamp duty valuation for the purpose of adopting the value of consideration under Section 50C should be as on the date of the agreement to sell and not the date of the transaction. This decision was based on the understanding that the amendment to Section 50C by the Finance Act, 2016, which allowed the value on the date of the agreement to be considered, was curative and retrospective from 1st April 2003.

The tribunal also cited the decision of the Ahmedabad SMC bench in Dharamshibhai Sonani vs. ACIT, which supported the view that the date of the agreement should be used for valuation purposes under Section 50C. The tribunal further referenced the Hon’ble Allahabad High Court's decision in CIT vs Shimbhu Mehra, which upheld the same principle.

Conclusion:
The tribunal concluded that the plea of the appellant was valid and remitted the issue back to the Assessing Officer for a fresh adjudication. The Assessing Officer was directed to consider the stamp duty valuation as on the date of the agreement to sell (04.07.2007) for the purpose of Section 50C and to recompute the capital gains accordingly. The tribunal emphasized that the amendment to Section 50C should be treated as retrospective, effective from 1st April 2003.

Result:
The appeal was allowed for statistical purposes, and the matter was sent back to the Assessing Officer for a de novo adjudication in light of the tribunal's observations and the legal position set out in previous relevant judgments.

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