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2023 (9) TMI 387 - AT - Income TaxLong Term Capital Gain (LTCG) - Addition u/s 50C - CIT(Appeals) was of the view that the 1st proviso to Section 50C(1) of the Act would get triggered for computing the amount of LTCG in the hands of the assessee - HELD THAT - AO had, inter alia, stated that though the copy of sale deed was available on record but the agreement to sell was not lying in the record. At this stage, we may herein observe that the A.O had in the course of remand proceedings not raised any doubt as regards the genuineness of the agreement to sell dated 06.03.2014. Considering all we may herein observe that as per the 1st proviso to Section 50C(1) of the Act as had been made available vide the Finance Act, 2016 w.e.f. 01.04.2017, where the date of agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same then 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. Ostensibly, as neither the agreement to sell dated 06.03.2014; nor the contents thereof had been doubted by the A.O in the course of the remand proceedings, therefore, as observed by the CIT(Appeals), and rightly so, the value assessable by the stamp valuation authority on the date of the agreement to sell i.e. 06.03.2014 was to be taken for computing full value of consideration for such transfer u/s. 50C - Accordingly, finding no infirmity in the view taken by the CIT(Appeals) who in our considered view had rightly triggered the 1st proviso to Section 50C(1) of the Act, we uphold the same. Appeal of revenue of dismissed.
Issues involved:
The appeal filed by the revenue against the order passed by the Commissioner of Income-Tax (Appeals) involves the deletion of addition made under section 50C of the Income-tax Act. The primary issue is the rectification of the Long Term Capital Gain (LTCG) on the sale of agricultural land, specifically regarding the sale consideration and Fair Market Value (FMV) discrepancies. Issue 1 - Rectification of LTCG Calculation: The original assessment determined the assessee's total income at Rs. 82,84,786, but a mistake was identified by the Assessing Officer (AO) regarding the LTCG on the sale of agricultural land. The AO rectified the assessment order by revising the assessed income to Rs. 95,84,286 based on the FMV of the land. The primary contention was whether the AO's rectification under section 154 was justified, considering the discrepancy in the sale consideration and FMV. Issue 2 - Application of Section 50C Proviso: The CIT(Appeals) partly allowed the appeal, emphasizing the application of the "1st proviso" to Section 50C(1) of the Act. The proviso states that if the agreement date and registration date differ, the value assessed by the stamp valuation authority on the agreement date should be considered for computing the full value of consideration. The main question revolved around whether the CIT(Appeals) correctly applied this proviso in determining the FMV for the land transfer. The CIT(Appeals) observed that the assessee received the entire sale consideration before the end of the financial year 2013-14, triggering the application of the "1st proviso" to Section 50C(1). The CIT(Appeals) noted that the AO did not raise doubts about the genuineness of the agreement to sell dated 06.03.2014 during the remand proceedings. As per the proviso, the FMV assessed by the stamp valuation authority on the agreement date should be considered, leading to the partial allowance of the appeal. The Tribunal upheld the CIT(Appeals)'s decision, dismissing the revenue's appeal based on the correct application of the proviso and the absence of infirmity in the assessment. In conclusion, the Tribunal affirmed the order of the CIT(Appeals) regarding the rectification of LTCG calculation and the application of the "1st proviso" to Section 50C(1) for determining the FMV of the agricultural land. The appeal of the revenue was dismissed, and the order was pronounced on 7th September 2023.
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