2024 (11) TMI 1482 - AT - Income Tax

Sale Value Under Section 50C Determined by Agreement Date; Stamp Valuation Authority's Value Accepted

The ITAT Ahmedabad held that the sale value under Section 50C should be determined based on the agreement date, 25/08/2010, as undisputed. The Stamp ... Addition invoking the provisions of Section 50C - Stamp Valuation Authority has valued the property - HELD THAT:- Since the factum entering into an agreement on 25/08/2010 is not in dispute, we hold that the value as on the date of entering into an agreement which was on 25/08/2010 be considered as sale value in accordance with law of provisions of Section 50C of the Act. Therefore, we set aside the order of the ld.CIT(A) and allow the grounds of appeal raised by the assessee. ISSUES: Whether the provisions of Section 50C of the Income Tax Act, 1961 apply to the sale transaction based on the date of registration of the sale deed or the date of the agreement to sell (Banakhat).Whether the value adopted by the Stamp Valuation Authority on the date of the agreement can be taken as the full value of consideration under the first proviso to Section 50C.Whether the addition made under Section 50C by disregarding the notarized Banakhat without pointing out any defect is legally sustainable. RULINGS / HOLDINGS: The Court held that the value as on the date of entering into the agreement (Banakhat) shall be considered as the sale value in accordance with the provisions of Section 50C of the Act, thereby setting aside the order of the lower authority.The Court found that the first proviso to Section 50C applies where the date of the agreement and date of registration differ, and where consideration (or part thereof) has been received by an account payee cheque, bank draft, or electronic mode on or before the date of the agreement; thus, the value adopted by the Stamp Valuation Authority on the date of the agreement may be taken as full value of consideration.The Court ruled that the lower authorities erred in not considering the duly notarized Banakhat without providing any valid reasons or pointing out any defect, and therefore the addition made by doubling the genuine notarized Banakhat was not tenable in law. RATIONALE: The Court applied the statutory framework of Section 50C of the Income Tax Act, 1961, which provides a 'special provision for full value of consideration in certain cases' where the consideration received is less than the value assessed by the Stamp Valuation Authority.The Court emphasized the applicability of the first proviso to Section 50C(1), which allows the value adopted by the Stamp Valuation Authority on the date of the agreement to be taken as full value of consideration where the agreement date and registration date differ and payment conditions are met.The Court relied on undisputed facts regarding the agreement date, payment advance, and execution of sale deed, and found no valid reason to disregard the notarized Banakhat.No dissent or doctrinal shift was indicated; the decision aligns with the legislative intent to prevent undervaluation while recognizing the date of agreement in valuation under Section 50C.