Section 50C

[Deepak Whorra]

If a Land and Building property is sold at a rate that is higher than the circle rate and the AO is still not accepting that, will Section 50C still apply ? If not then under which section can the Assesse claim his right

I believe that Section 50C, applies only if the sale value is below the circle rate as accepted by the Stamp Valuing Authority. Is this correct ?

[sanjeev bajaj]

Yes, if the  Income falls under the head Capital Gain. The A O cannot adopt the value more than the value adopted by the stamp valuation authority as per section 50c of the act.

You have to submit written reply to the A o for the applicability of sec. 50C and also show him sdub-section (3) of sec. 50C that even if the valuation as per valuation officer is more than the value adopted by the valuation authority , the AO has to adopt the valuation as per stamp valuation authority.

 

Need not worry.

[Deepak Whorra]

I think that I have not framed my question properly.

 In our case we had calculted the Capital Gaind at a value which is NOT below the circle rate as assessed by the stamp valuation authority . The AO says that, in our case Section 50C does not apply since we have not compute at a value Below the Circle rate.

 If we examine 50C, then we see that sub section 1 says that if the consideration is less than the circle rate then the circle rate will be adopted.

Sub section 2 states that if the assesse claims before the AO that the actual value is LOWER than the circle rate then the AO can ask for a valuation report.

Sub section 3 states that if the valuation adopted by the Valuation Officer AFTER REFERENCE to him ( the valuation Officer ) UNDER SUB-SECTION 2 is more than the circle rate then the circle rate will be adopted.

 In our case the computation is NOT BELOW the circle rate. So the AO is saying that Section 50C does not apply to us.

 Is she correct because technically 50 C applies to only those cases where the sale price is below the circle rates.. Will this section still apply to cases where the sale price is more than the circle rate.

[sanjeev bajaj]

It is very interesting case and situation.

If you read sub section(1) of Section 50C, it refers about the valuation adopted by the stamp authority. This section never refers the word 'Circle Rate'.

In your case, The consideration received is the value adopted by the stamp valuation authority. Hence no addition can be made.

 Further, do the AO has any evidence that the unaccounted consideration is received against such sale. If not the AO cannot make any addition.

 Section 50C, is the deeming provision i.e if the consideration is below the value adopted than the value adopted can be taken as consideration. However, if the value adopted is mopre than or equal to the value adopted than no addition can be made unless and until some concrete and substantial evidences are available with the AO

AI Summary

Section 50C: No Adjustment Needed When Property Sells Above Circle Rate, AO Requires Evidence for Extra Valuation A query was raised regarding the applicability of Section 50C of the Income Tax Act when a property is sold above the circle rate, yet the Assessing Officer (AO) disputes this. The initial understanding was that Section 50C applies only if the sale value is below the circle rate. Replies clarified that Section 50C mandates using the stamp valuation authority's rate if the sale value is lower, but not if it exceeds this rate. The AO cannot add value without evidence of unaccounted consideration. The discussion highlighted the section's role as a deeming provision for valuations below the circle rate.