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2020 (8) TMI 55 - AT - Income TaxCapital gain computation - stamp duty valuation for the purpose of adopting value of consideration u/s 50C - date on which the agreement to sale was entered into OR date on which the transactions actually took place - Whether Section 50C applies to the seller of the land and not to the power of attorney holder/constituted attorney of the transaction in question? - HELD THAT - When the date of agreement fixing the amount of consideration and the date of registration of the property being the capital asset is different, the matter should be referred to the DVO by the Ld. AO for determination of the valuation as on the date of agreement keeping in view the provision of Sec.50C of the Act instead of that as we find in the case in hand the Revenue has assessed the valuation of the property on the basis of the valuation so assessed by the Stamp Duty Authority and the difference amount has been added to the total income of the assessee which in our considered view is not permissible in law. See AMITKUMAR AMBALAL (HUF) VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-10, AHMEDABAD 2017 (11) TMI 1904 - ITAT AHMEDABAD - We delete the addition made thereof. Hence, assessee s appeal is allowed. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT - Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited 2020 (5) TMI 359 - ITAT MUMBAI
Issues Involved:
1. Applicability of the amendment to Section 50C of the Income Tax Act, 1961. 2. Whether Section 50C applies to the constituted attorney or the actual owner. 3. Correctness of the addition of ?3,00,000 under capital gains. 4. Whether the CIT(A) should have referred the matter to the DVO for determining the Fair Market Value. Issue-wise Detailed Analysis: 1. Applicability of the amendment to Section 50C of the Income Tax Act, 1961: The assessee argued that the amendment introduced by the Finance Act, 2016, to Section 50C, which is curative in nature, should apply retrospectively. The amendment stipulates that the stamp duty valuation on the date of the agreement to sell should be considered for determining the sale consideration. The Tribunal agreed, citing the case of Amitkumar Ambalal (HUF) vs. ACIT, which held that the amendment should be treated as retrospective from 1st April 2003. The Tribunal emphasized that the valuation should be based on the date of the agreement rather than the registration date, especially when there is a significant time gap between these two events. 2. Whether Section 50C applies to the constituted attorney or the actual owner: The assessee contended that Section 50C applies to the seller of the land and not to the power of attorney holder. The Tribunal observed that the power of attorney executed on 06.07.1997 authorized the assessee to sign on behalf of the vendors, but did not make him the actual owner. The Tribunal concluded that the assessee was not the de-facto owner and thus, Section 50C could not be applied to him personally. 3. Correctness of the addition of ?3,00,000 under capital gains: The Tribunal noted that the assessee acted merely as a constituted attorney and did not receive any consideration personally. The addition of ?3,00,000 under capital gains was deemed incorrect as the assessee was not the actual owner. The Tribunal emphasized that the assessee's role was limited to signing the deed on behalf of the original owners, who signed as confirming parties. 4. Whether the CIT(A) should have referred the matter to the DVO for determining the Fair Market Value: The Tribunal found that the CIT(A) erred by not referring the matter to the DVO for valuation. It was held that the valuation should be restricted to the consideration mentioned in the agreement of sale, as per the amended Section 50C, unless referred to the DVO. The Tribunal cited the judgment in the case of Amitkumar Ambalal (HUF) vs. ACIT, which supported the view that the valuation should be based on the agreement date, not the registration date. Conclusion: The Tribunal quashed the addition made by the Revenue, ruling in favor of the assessee. It was held that the provisions of Section 50C, as amended, should be applied retrospectively, and the valuation should be based on the date of the agreement. The Tribunal emphasized that the assessee, as a constituted attorney, could not be considered the actual owner for the purposes of Section 50C. The appeal was allowed, and the addition was deleted. Procedural Note: The Tribunal also addressed the issue of order pronouncement delay due to the COVID-19 pandemic. It was clarified that the lockdown period should be excluded while computing the limitation period under Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963, as supported by the judgment in DCIT vs. JSW Ltd.
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