Stamp duty valuation on earlier agreement date applies where allotment letters fix consideration and non cash payment occurred before that date.

Allotment letters dated 08.05.2010 were held to qualify as agreements to sell because they fixed consideration and were followed by part payments through non cash banking channels on or before that date; therefore the provisos to the income tax valuation rule require using the stamp duty value as on 08.05.2010 rather than on the later registration date. Absent contemporaneous stamp valuations for that earlier date, the matter is remitted to the Assessing Officer for the limited purpose of comparing transaction value with stamp duty valuation as on the allotment date after giving the assessee an opportunity to be heard.

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Issues: Whether the allotment letters dated 08.05.2010 in respect of the two flats constitute an "agreement to sell" for the purposes of provisos to Section 56(2)(x)(b) of the Income-tax Act, 1961, and whether stamp duty value as on the date of such allotment letters (08.05.2010) should be taken instead of the stamp duty value on date of registration (20.03.2018).

Analysis: The issue involves interpretation and application of provisos to Section 56(2)(x)(b) of the Income-tax Act, 1961 which permit taking the stamp duty value on the date of an earlier agreement where (i) the date of agreement fixing consideration and date of registration differ and (ii) consideration or part thereof was paid by a mode other than cash on or before the date of that agreement. Relevant documentary evidence includes allotment letters dated 08.05.2010 acknowledging part payments by cheques and signed by the assessee, and subsequent agreements showing payments from 2007 onwards. Coordinate bench decisions of the Tribunal establish that an allotment letter can qualify as an agreement to sell when its terms fix consideration and payments are made as per that letter, and that the provisos apply where part consideration was paid by banking channels prior to the agreement date. The record shows compliance with terms of the allotment letters and part payments by non-cash modes on or before the date of allotment. The Assessing Officer considered stamp duty value as on registration date (20.03.2018); however, the provisos direct consideration of stamp duty value as on the earlier agreement date when conditions are met. Absent contemporaneous stamp duty valuations for the allotment date on record, the appropriate course is to restore the matter to the Assessing Officer for limited purpose of comparing transaction value with stamp duty valuation as on the date of the allotment letters after affording the assessee opportunity of being heard.

Conclusion: The allotment letters dated 08.05.2010 qualify as agreements to sell for the purposes of the provisos to Section 56(2)(x)(b) of the Income-tax Act, 1961; the provisos apply because part consideration was paid by non-cash modes on or before that date; consequently, stamp duty value as on 08.05.2010 should be taken for the purposes of Section 56(2)(x)(b). The matter is restored to the Assessing Officer for the limited purpose of comparing the actual sale consideration with the stamp duty valuation as on the date of the allotment letters after affording the assessee an opportunity of being heard. The grounds raised by the assessee are allowed.

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