Stamp duty valuation under Section 50C: agreementdate banked payment qualifies, AO must seek valuation officer only if stamp value exceeds consideration.

Where the agreement date and registration date differ, the sale consideration ascertained on the agreement date is to be treated for deeming full value of consideration when payment or part payment was received through banking or electronic channels; the assessee having received accountpayee cheques at agreement date therefore benefits from that proviso. The appointed date for stamp duty valuation is the agreement date (12.03.2012) and not the deed registration date. The assessing officer must determine the stamp duty value on the agreement date and, only if it exceeds the recorded consideration, refer the matter to the valuation officer before making any addition.

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Issues: Whether the addition of Rs.17,80,299/- by treating the stamp duty valuation as the full value of consideration under Section 50C of the Income-tax Act, 1961 is sustainable in view of the agreement date and receipt of part consideration by account payee cheques prior to the agreement date.

Analysis: Section 48 prescribes computation of capital gains by reference to the full value of consideration. Section 50C operates as a deeming provision replacing the actual sale consideration with the stamp duty valuation where the latter is higher. The first proviso to Section 50C permits use of the stamp valuation as on the date of the agreement (instead of date of registration) where the date of agreement and date of registration differ, provided that the amount or part thereof has been received by the assessee by account payee cheque, bank draft or electronic clearing system on or before the date of the agreement. The record shows an Agreement to Sell in March 2012 and receipt of more than Rs.1,80,00,000/- by account payee cheques in March 2012 before registration in May 2012. Accordingly, the proviso to Section 50C is engaged and the relevant stamp duty valuation date for comparison is the date of the agreement (12.03.2012). If the stamp valuation on that date exceeds the contract price, the AO may then, in accordance with sub-clause (ii) of Section 50C, obtain a valuation by the DVO to determine the appropriate deemed value.

Conclusion: The addition is not sustainable as made; benefit of the first proviso to Section 50C applies. The impugned orders are set aside, the additions deleted, and the matter is remitted to the AO to identify the stamp duty valuation as on 12.03.2012 and, if necessary, obtain DVO valuation and recompute the tax consequences.

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