2023 (9) TMI 591 - AT - Income Tax

Revision u/s 263 - sale consideration of immovable property sold within the scope of section 50C - assessee having sold immovable property for total consideration as recorded in the sale deed, less than the value fixed by the stamp duty authorities in terms of section 50C - HELD THAT - Admittedly, it is not any one s case that value registered in the sale deed at Rs. 80 lakhs against each of the transactions or immovable property is accepted by the Sub-Registrar and registration charges as well as stamp duty charges are paid based on the value determined Sub-Registrar at Rs. 80 lakhs. The assessee has computed stamp duty and paid Rs. 5,60,000/- on the basis of each of the documents. There is no computation of deficit stamp duty and this is accepted by Sub-Registrar. In a situation, the value so adopted or assessed shall for the purpose of section 50C of the Act, to be deemed to be full value of consideration or accruing, as result of such transfer. Here, under this provision there is no scope for ambiguity that once, stamp valuation authority adopts value that has to be taken as final for the purpose of computation of long term capital gain and for taking fair market value as on date of sale as assessed by stamp valuation authority. In the present case before us, the stamp valuation authority has assessed and registered the sale deed for proper consideration at Rs. 80 lakhs each (for four properties) considering value at Rs. 3.20 crores and not Rs. 6.40 crores as alleged by the Revenue. This fact is clear from the evidences placed before us. As in the case of CIT Vs. Smt. Padmavathi 2020 (10) TMI 425 - MADRAS HIGH COURT has considered this issue and held that guideline value is only an indicator and the same is fixed by the State Government for the purposes of calculating stamp duty for registering conveyance deed and merely because, the guideline was higher than the sale consideration shown in the deed of conveyance, cannot be sole reason for holding that the assessment as erroneous and prejudicial to the interest of revenue. Hence, revision order passed by the PCIT is bad in law. In the present case before us, facts are much better. There is no excess or deficit stamp duty paid by the assessee or higher value is estimated by the stamp valuation authority for registering documents. Hence, we are of the view that revision order passed by the PCIT is bad in law and hence, quashed. Appeal of the assessee is allowed.

Summary

Issues involved:
The judgment addresses the issue of the Principal CIT assuming jurisdiction under section 263 of the Income Tax Act and revising an assessment order framed by the Assessing Officer under section 143(3) of the Act, specifically concerning the sale consideration of immovable property within the scope of section 50C of the Act.

Comprehensive Details:

Issue 1: Jurisdiction under section 263 of the Act
The appeal challenges the order of the Principal CIT assuming jurisdiction under section 263 of the Act and revising the assessment framed by the Assessing Officer under section 143(3). The Assessing Officer had considered the sale consideration of immovable property in line with section 50C of the Act, leading to the contention that the assessment order was not erroneous or prejudicial to revenue interests. The appellant raised various grounds challenging this assumption of jurisdiction.

Issue 2: Assessment of sale transaction
The appellant, an individual, filed a return of income for the relevant assessment year, disclosing the sale of four immovable properties. The Assessing Officer accepted the sale consideration and assessed long-term capital gains accordingly. Subsequently, the Principal CIT issued a show-cause notice for revising the assessment order under section 263, citing the sale value determined by the stamp valuation authority as higher than the consideration value declared in the sale deed.

Issue 3: Compliance with section 50C of the Act
The appellant contended that the stamp valuation authority had determined the value of the property at the same amount as the consideration value declared in the sale deed, and that the provisions of section 50C should not apply once the Sub-Registrar accepts the value. The appellant also relied on a judgment of the Hon'ble Madras High Court in a similar case.

Judgment:
After considering the contentions of both parties and the provisions of section 50C, the Tribunal held that the revision order passed by the Principal CIT was not justified. The Tribunal emphasized that the stamp valuation authority's assessment, which matched the consideration value declared in the sale deed, should be accepted as final for the purpose of computing long-term capital gains. Referring to the judgment of the Hon'ble Madras High Court, the Tribunal concluded that the guideline value set by the State Government is an indicator for stamp duty calculation and cannot be the sole reason for deeming an assessment as erroneous and prejudicial to revenue interests. Therefore, the Tribunal allowed the appeal of the assessee, quashing the revision order passed by the Principal CIT.

This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the key arguments and conclusions related to each issue.