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2019 (10) TMI 340 - AT - Income TaxCapital gain computation - Addition u/s 50C - Change in Circle Rate between the date of agreement and actual date of registration - whether the stamp duty valuation on the date of agreement will be relevant for the purpose of adopting full value consideration u/s 50C or stamp duty valuation as on the date of sale deed will be considered for this purpose - HELD THAT - Tribunal held that proviso to Section 50C of the Act is effective from 01-04-2013 and amendment brought to Section 50C was treated as retrospective. The other decisions of the Tribunal as relied on by the ld.AR of the assessee have also taken consistent view that proviso to section 50C is having retrospective effect being remedial / clarificatory in nature. Following the decisions of the Coordinate Benches of the tribunal and in the absence of any contrary decision brought to my notice I hold the DLC rate as on date of 31-07-2014 when agreement to sell was entered between the parties and part consideration received by the assessee through banking channel shall be taken as full value consideration. Accordingly the AO is directed to adopt full value consideration as DLC rate on the date of agreement and if sale consideration shown in the sale deed is more than DLC Rate of the property as on s31-07-2014 then no addition u/s 50C - Decided in favour of assessee.
Issues Involved:
1. Addition of income under Section 50C of the Income Tax Act, 1961. 2. Retrospective applicability of the proviso to Section 50C. Detailed Analysis: 1. Addition of Income Under Section 50C: The core issue revolves around the addition of ?1,71,600 to the assessee's income under Section 50C. The assessee sold an immovable property for ?34,50,000 in the Assessment Year 2015-16. However, the Assessing Officer (AO) considered the stamp duty value of ?36,21,600 on the date of registry and added the difference of ?1,71,600 to the assessee's income. The assessee argued that the stamp duty valuation should be taken as of the date of the agreement to sell, which was 31-07-2014, where the agreed sale consideration was ?34,50,000 and part payment of ?1,00,000 was received through banking channels. The AO rejected this contention, stating that the stamp duty valuation on the date of the sale deed should be considered, leading to the addition of ?1,71,600. The CIT(A) upheld the AO's decision, stating that the proviso to Section 50C has a prospective effect and not a retrospective one. 2. Retrospective Applicability of the Proviso to Section 50C: The assessee contended that the proviso to Section 50C, which allows the stamp duty valuation on the date of the agreement to be considered if part payment is received through banking channels, should apply retrospectively. The assessee relied on several decisions from various Tribunal Benches supporting this view, including: - Amit Bansal vs ACIT, Central Circle, Karna - Rahul G Patel vs DCIT, Circle 1(2), Baroda - Dharamashibhai Sonani vs ACIT, Circle 9, Surat - Smt. Chalasani Naga Ratna Kumari vs ITO, Ward-3(2), Visakhapatnam The Tribunal in these cases held that the proviso to Section 50C is clarificatory and remedial in nature, thus having retrospective effect from the date Section 50C was introduced. The Tribunal, considering the rival submissions and relevant material, noted that there was no dispute regarding the agreement dated 31-07-2014 and the receipt of part consideration of ?1,00,000 through banking channels. The Tribunal referred to the decisions of the Coordinate Benches, particularly the Ahmedabad Bench in Rahul G Patel vs DCIT and Dharamashibhai Sonani vs ACIT, which discussed the retrospective applicability of the proviso to Section 50C. In Rahul G Patel vs DCIT, the Tribunal observed that the agreement to sell was executed before the sale deed, and part payments were made through account payee cheques. The Tribunal held that the stamp duty valuation on the date of the agreement should be considered for computing the full value of consideration under Section 50C, treating the proviso as retrospective. Similarly, in Dharamashibhai Sonani vs ACIT, the Tribunal held that the proviso to Section 50C, being remedial, should be applied retrospectively to avoid undue hardship to the assessee. Tribunal's Decision: Following the principles laid down in the aforementioned cases, the Tribunal in the present case held that the DLC rate as on 31-07-2014, the date of the agreement, should be taken as the full value consideration. The Tribunal directed the AO to adopt the DLC rate on the date of the agreement and if the sale consideration shown in the sale deed is more than the DLC rate as on 31-07-2014, no addition under Section 50C is called for. Conclusion: The appeal of the assessee was allowed, and the AO was directed to adopt the full value consideration based on the DLC rate on the date of the agreement, thereby nullifying the addition of ?1,71,600 to the assessee's income. The judgment underscores the retrospective applicability of the proviso to Section 50C, providing relief to the assessee.
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