Assessee entitled to Section 50C provisos for long-term capital gains when consideration exceeds stamp valuation authority rates

ITAT Surat held that the assessee was entitled to benefit of first and second provisos to Section 50C for computing long-term capital gains. The first proviso allows adoption of stamp valuation authority value on agreement date when agreement and registration dates differ. The second proviso requires consideration receipt through account payee cheque or banking channel. Since the assessee received part consideration prior to sale agreement execution in June 2011 through proper banking channels, and the sale consideration of Rs. 1.94 crore exceeded the jantri rate of Rs. 64,82,526 applicable on agreement date, the addition made by AO under Section 50C was deleted.

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Issues Involved:
- Addition of long term capital gain u/s 50C
- Applicability of First and Second proviso to Section 50C

The appeal was against the order of National Faceless Appeal Centre, Delhi for assessment year 2013-14, arising from the assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961. The main issue raised by the assessee was the addition of long term capital gain u/s 50C amounting to Rs. 55,64,300.

The Assessing Officer noted that the assessee sold immovable property for Rs. 1.94 crores, while the Stamp Valuation Authority valued it at Rs. 2.50 crores. This led to the application of Section 50C. Despite the assessee's explanations and request to refer to the District Valuation Officer, the Assessing Officer added Rs. 55,64,300 to the income of the assessee.

The assessee contended before the NFAC/Ld.CIT(A) that the sale consideration exceeded the prevailing jantri rate at the time of sale, making the First and Second proviso to Section 50C applicable. The NFAC/Ld.CIT(A) dismissed the appeal, leading to the current appeal before the Tribunal.

During the hearing, the Ld. AR for the assessee argued that the First and Second proviso to Section 50C were clearly applicable in this case, as evidenced by the part payment received by the assessee and the sale consideration exceeding the jantri rate. The Ld. Sr-DR for the Revenue supported the lower authorities' decision.

After considering the submissions and relevant case law, the Tribunal found that the assessee was eligible for the benefit of the First and Second proviso to Section 50C. As the sale consideration exceeded the jantri rate and part payment was received through banking channels, the addition made by the Assessing Officer was deemed unsustainable and was therefore deleted.

In conclusion, the Tribunal allowed the appeal of the assessee, ruling in favor of the applicability of the First and Second proviso to Section 50C in determining the long term capital gain.

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