2020 (2) TMI 1444 - AT - Income Tax

Capital gain computation - Applicability of section 50C - adopting the circle rate on the date of Sale Agreement executed on 07.08.1995 OR on the date of sale deed executed on 30.08.2008 as done by the AO - HELD THAT - Since the evidence about receipt of part sales consideration by way of Account Payee Cheques before the date of sale deed is also available in the present case as discussed above, we do not feel any necessity to remand the matter to AO. Respectfully following these tribunal orders ed in the case of Bharathi Dev Anandani vs. ACIT 2016 (4) TMI 77 - ITAT BANGALORE and in the case of M/s Universal Power Transformer Pvt. Ltd. Vs. DCIT 2019 (8) TMI 177 - ITAT BANGALORE we hold that the Stamp Duty Value as on the date of sale agreement on 07.08.1995 should be adopted to work out capital gain u/s 50C in both these cases as against the stamp Duty Value as on date of the sale deed as adopted by the AO. This issue is decided in favour of the assessee.

Summary

Issues:
Capital gain calculation based on Section 50C - Date of sale agreement vs. date of sale deed.

Analysis:
The judgment involves two connected assesses, a mother and son, joint owners of a property with disputed capital gains from its sale. The appeals challenge CIT(A) orders dated 07.12.2018 for the mother and 05.01.2016 for the son. The key argument revolves around applying Section 50C of the Act using the circle rate on the date of the sale agreement (07.08.1995) rather than the date of the sale deed (30.08.2008) as done by the Assessing Officer (AO).

During the hearing, the assessee's representative referred to tribunal orders in similar cases and highlighted the importance of the date of the sale agreement in determining the applicability of Section 50C. Citing precedents like Bharathi Dev Anandani vs. ACIT and M/s Universal Power Transformer Pvt. Ltd. Vs. DCIT, it was argued that if the sale consideration was received by the seller before the sale deed date through account payee cheques, the provisions of section 50C should be applied based on the sale agreement date. The evidence of part sales consideration received through cheques before the sale deed date was presented, eliminating the need for remand to the AO.

The Tribunal found no dispute regarding the sale agreement date (12.08.1995) and the advance amount received, aligning with the facts noted by CIT(A) in the son's case. Relying on the tribunal orders cited by the assessee's representative and the evidence of advance payment through cheques before the sale deed date, the Tribunal ruled in favor of the assessee. It held that the Stamp Duty Value as on the date of the sale agreement should be used to calculate capital gains under Section 50C, contrary to the AO's approach based on the sale deed date. As no arguments were presented on other grounds, they were considered not pressed and rejected accordingly.

In conclusion, both appeals were partly allowed based on the above analysis, emphasizing the importance of the sale agreement date in determining the Stamp Duty Value for capital gain calculation under Section 50C.