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2018 (10) TMI 1992 - AT - Income TaxAddition of Long term capital gain - Transfer of capital asset u/s 2(47) - relevant date of transfer - addition invoking the provisions of section 50C - valuation of the impugned property as per the stamp duty guideline for A.Y. 2007-08 - HELD THAT - As joint property was owned by both the assessees who are husband and wife - we find that the assessee has been successful to demonstrate that there was a valid transfer of the impugned capital asset as per the provision of section 2(47) of the Act on 24.03.2007 as the assessee received total sale consideration through account payee cheque and possession was also given to the buyer and the assessee offered the capital gain from the impugned transfer in its income tax return for F.Y. 2007-08. We, therefore, are of the considered view that both the lower authorities erred in applying the valuation of the impugned property as per the stamp duty guideline for A.Y. 2007-08, merely for the reason that sale deed was registered on 04.08.2007. No addition was therefore, called for by applying the value of property at Rs.1,23,00,000/-. We accordingly delete the addition each made in the hands of both the assessees and allow the ground raised in both the appeals.
Issues:
Reopening of assessment under section 147 r.w.s. 148, Assessment order confirmation under section 147 r.w.s. 143(3), Addition of Rs.19,00,000/- u/s 50C for Long Term Capital Gain. Analysis: 1. The appeals were filed against the order of the Ld. Commissioner of Income Tax(Appeals) confirming the reopening of the case under section 147 r.w.s. 148 and the assessment order passed under section 147 r.w.s. 143(3). The issues raised were common in both appeals. The grounds of appeal challenged the reopening of the case, the assessment order, and the addition of Rs.19,00,000/- under section 50C for Long Term Capital Gain. 2. The Ld. Counsel for the assessee requested not to press ground No.1 & 2 regarding the validity of reopening the assessment. The only common issue remaining was the addition of Rs.19,00,000/- under section 50C, which was made by the Ld. Assessing Officer invoking the provisions of the Income Tax Act. 3. The facts of one of the appellants, Mr. Manoj Yadav, were considered for adjudication. The property was jointly sold by Mr. Yadav and his wife during the financial year 2006-07. The Ld. Assessing Officer added Rs.19,00,000/- each in the hands of both assessees under the head of long term capital gain based on the valuation of the property by the departmental valuation officer. 4. The assessee contended that the valuation for stamp duty purposes should have been based on the date of transfer, not the date of registration of the sale deed. The Ld. Counsel cited amendments in section 50C by the Finance Act 2016 and various judgments supporting the assessee's position. 5. The Ld. Departmental Representative argued in support of the lower authorities' order. The Tribunal carefully considered the contentions, material on record, and referred judgments. The common issue revolved around the addition made under section 50C, which was confirmed by the Ld. CIT(A). 6. The Tribunal observed that the property was sold during the financial year 2006-07, and the consideration was received by the assessee. Possession was also handed over to the buyer during that year. The dispute arose due to the date of registration of the sale deed, which was later than the date of transfer claimed by the assessee. 7. Considering the amendments in section 50C and relevant judgments, the Tribunal held that the proviso inserted by the Finance Act 2016 was clarificatory in nature. The Tribunal found in favor of the assessee, stating that the valuation for stamp duty should be based on the date of the agreement to sell, not the date of registration of the sale deed. 8. The Tribunal concluded that there was a valid transfer of the capital asset as per the provisions of the Act. The lower authorities erred in applying the valuation of the property based on the registration date of the sale deed. Consequently, the addition of Rs.19,00,000/- in the hands of both assessees was deleted, and the ground raised in the appeals was allowed. 9. In the final decision, both appeals of the assessee were partly allowed, and the order was pronounced on 09.10.2018.
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