2019 (8) TMI 1863

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..... CIT(A) in deleting the addition of Rs. 52,86,630/- made u/s. 50C of the Act that the proviso to sub section (1) of Sec. 50C of the Act is not with retrospective effect of it came into effect from 01.04.2017 only. 3. The fact in brief is that return of income declaring income of Rs. 33,61,033/- was filed on 10.07.2012. The case of the assessee was processed u/s. 143(1) of the Act at the income shown in the return of income. Thereafter, a notice u/s. 148 of the Act was issued on 24.11.2014 for the reason that assessee has sold Bunglow situated at Bopal, Ahmedabad for Rs. 76,00,000/- on 06.04.2011 and the value of the aforesaid property according to the stamp duty valuation authority was to the amount of Rs. 1,27,43,877/-, however, the as....

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.... assessee. 4. Assessee has preferred appeal before the Ld. CIT(A). Ld. CIT(A) has allowed the appeal of the assessee stating that a proviso has been inserted to sub section (1) of Sec. 50C by the Finance Act, 2016 which provides that where the date of agreement fixing the account of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purpose of computing full value of consideration for such transfer. The relevant part of the decision of the CIT(A) is reproduced as under:- "Decision: 3.4. In this case the assessee has sold a bungalow for Rs.76 lakhs on 6....

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....f stamp the assessee could not registered document at the year end and same document has been delayed for 5 days. The appellant has contended that she took Rs.76 lakhs as the consideration and the whole sale consideration was received for F.Y. 2010-11 as per the jantri rate prevailing on that date and possession was given on 30.3.2011. The appellant has relied upon the decision in the case of Dy. CIT Vs. S. Venkat Reddy 32 taxman 324 (2013) (Hyderabad Trib.) wherein it is held that "where transfer was completed in terms of Section 2(47) by giving possession of property on date of sale agreement, but registration was delayed on bonafide reasons and execution of sale deed was only a legal formality, stamp duty value on date of sale agreement ....

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....eement was required to be adopted for computing capital gains. In the Act also a proviso has been inserted to subsection (1) of Section 50C by the Finance Act, 2016 which provides that where the date of agreement fixing the amount of consideration and the date of registration for the transfer of the capital assets are not the same, the value adopted or assessed or assessable by the Stamp Valuation Authority on the date of agreement may be taken for the purpose of computing full value of consideration for such transfer. Considering the above, I am of the opinion that the AO is not justified in adopting the value adopted by the Stamp Valuation Authority on the date of sale deed. The AO is directed to adopt the value of the property as adopted....

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....ground that sale value determined by the stamp valuation authority was higher than the sale consideration referred in the sale agreement. The Ld. CIT(A) has deleted the addition of Rs. 52,86,630/- made by the AO u/s. 50C of the Act after taking into consideration that proviso to sub section (1) to sec. 50C of the Act and referring the decision of Hyderabad ITAT in the case of DCIT vs. S. Venkat Reddy 32 taxman 324 (2013) (Hyderabad Trib.). During the course of appellate proceedings before us the Ld. Counsel has placed reliance on the decision of Co-ordinate Bench of the ITAT in the case of Dharamshibhai Sonani. We have gone through the proviso to sub section (1) of Sec. 50C of the Finance Act, 2016 with effect from 01.04.2007 which reads....

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....ssessee is indeed well taken and deserves acceptance. What follows is this. The matter will now go back to the Assessing Officer. In case he finds that a registered agreement to sell, as claimed by the assessee, was actually executed on 29.6.2005 and the partial sale consideration was received through banking channels, the Assessing Officer, so far as computation of capital gains is concerned, will adopt stamp duty valuation, as on 29.6.2005, of the property sold as it existed at that point of time. In case the assessee is not content with this value being adopted under section 50C he will be at liberty to seek the matter being referred to the DVO for valuation, again as on 29.6.2005. of the said property. As a corollary thereto, the subseq....