TaxTMI 
TaxTMI 
2026 (7) TMI 687
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....ing total income of Rs. 28,54,570/-. The AO has reopened the assessment for the reason that there was a difference between the sale consideration and guideline value of the property sold which needs to be brought to tax u/s. 50C of the Act. The AO has held that the 'deed of sale' was registered for consideration of Rs. 94,00,000/- but the stamp duty was paid on guideline value of the property as on the date of registration which was valued at Rs. 1,93,06,125/-. The AO invoked Section 50C of the Act and made an addition of the differential value between the sale consideration and guideline value i.e. Rs. 99,06,125/- and brought to tax. During the course of reassessment, the Assessee has submitted that the Assessee has received consideration through banking channel and the sale deed was registered in pursuance of the prior 'Agreement to sell'. However, the AO did not agree with contention of the Assessee as according to him the agreement for sale is not registered and as such it does not have legal sanctity. On appeal, the Ld. CIT(A) confirmed the addition u/s. 50C of the Act on the same reasoning that since the 'agreement to sell' was not registered, the same cannot be relied upon. ....
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....ment to sell on 11.07.2013 in respect of the subject property for a total consideration of Rs. 94,00,000/-. It is also an admitted position that a sum of Rs. 48,50,000/- was received by the assessee through RTGS on the very date of the agreement, i.e., 11.07.2013, and the balance amount of Rs. 45,00,000/- was subsequently received through RTGS on 23.03.2015. Thereafter, pursuant to the said agreement, the registered sale deed came to be executed on 07.03.2017. 7. The AO invoked section 50C by adopting the guideline value as on the date of registration amounting to Rs. 1,93,06,125/- and consequently made an addition of Rs. 99,06,125/- being the difference between the stamp duty value and the actual sale consideration. The ld.CIT(A) confirmed the addition primarily on the reasoning that the agreement to sell was not registered and, therefore, could not be relied upon for extending the benefit of the proviso to section 50C. The appellate authority has further doubted the genuineness of the transaction by observing that the amount initially reflected as unsecured loan was subsequently treated as sale consideration. 8. We are unable to persuade ourselves to concur with the reasoni....
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.... as an unsecured loan also does not advance the Revenue's case. The registered sale deed itself acknowledges that the amounts earlier received through banking channels constituted the sale consideration payable under the agreement. The true nature of a transaction has to be gathered from the cumulative documentary evidence and the surrounding circumstances rather than from the nomenclature employed in the books of account at an earlier point of time. In the absence of any material demonstrating that the agreement was sham, fabricated or subsequently created, mere accounting classification cannot override the substantive evidence available on record. 12. Therefore, the assessee has satisfied the condition in the Proviso which mandates that part payment should be made through banking channel. In so far as the allegation of both the lower authorities is concerned that the 'Agreement to sell' is unregistered, we note that since the 'Agreement to sell' is only an agreement between parties, it is not mandatory to register the same unlike a sale deed which legally conveys the title of the immovable property transferred and therefore a sale deed needs to be registered to transfer th....
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.... the agreement date, then the stamp duty value as on the agreement date must be taken for the purpose of section 56(2)(vii)(b). The relevant observation of the Tribunal in that case is as under: "10. First proviso to section 56(2)(vii) (b) categorical provides that where the date of agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purpose of this provision. Admittedly, the agreement fixing the consideration was entered into on 21-6-2022 fixing the value of Rs. 1.82 crores and the sale deed was registered on 13-8-2013. Prescription of the second proviso is admittedly fulfilled in the instant case inasmuch as the assessee paid a sum of Rs. 26 lakhs in FY 2010-11 (ie. on 17-6-2010 Le. even before the date of the agreement to sell being 21-6-2022) as part payment through banking channel. In view of the foregoing discussion, the provisions of s. 56(2)(vii)(b) do not apply to the facts of the instant case as it is covered by the first and second provisos inasmuch as the assessee entered into an agreement fixing the amount of con....