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2023 (11) TMI 932 - AT - Income TaxComputation of capital gain - sale of land in two parts different AYs - basis of the SRO s letter to ascertain the guideline value of the land sold by the assessee - AO determined such Long-Term Capital Gain as per provisions of section 50C - CIT (A) while upholding the action of the AO in adopting the SRO s stamp duty value of the property @ 1200 per sft, however, directed AO to exclude the area allotted for roads, parks and open places which could not be plotted as they are pledged to the Govt.- HED THAT - We agree with the contention of assessee that when a part of the land i.e. 5.74 acres out of the total area of 8.66 acres was sold in A.Y 2013-14 and the remaining part of 2.92 acres of land was sold in A.Y 2014-15, the AO instead of taking the value of the land in acres could not have taken the value per sft which is for developed land with internal roads etc. The final agreement and the receipt dated 28.03.2014 did not alter the nature of land in the hands of the assessee nor did it alter the sale value fixed in the agreement. Assessee cannot be fastened with liability by adopting higher rate of valuation of the land which was developed by Developers in the year 2014 since the assessee had given up all her rights in land on 10.01.2013 itself when the Registered GPA was given to Developers and the guideline value on that date was Rs. 90 lakhs per acres. Under these circumstances when the assessee has sold the land at Rs. 1.05 crores as against the guideline value of Rs. 90 lakhs per acres, therefore, we are of the considered opinion that the Assessing Officer is not justified in applying the rate of Rs. 1200 per sft which in our opinion is the rate applicable for developed land. Under these circumstances we are of the considered opinion that in view of the proviso to section 50C where the date of agreement fixing the consideration and date of registration and transfer of capital asset in question are not the same, the value adopted or assessed or assessable by the stamp valuation authority on date of agreement is to be taken for purpose of full value of consideration. Also it has been held in various decisions that the amendment to section 50C introduced by the Finance Act 2016 for determining the full value of consideration in the case of immovable property is curative in nature and will apply retrospectively. As decided in Vummudi Amarendran ( 2020 (10) TMI 517 - MADRAS HIGH COURT ) decided an identical issue and has held that provisions of section 50C should be taken retrospectively from the date when the proviso exists. Where the date of agreement fixing the amount of consideration and the date of registration of property is different, value adopted by stamp valuation authority on the date of agreement has to be taken for purposes of computing full value of consideration of such transfer. Since in the instant case, admittedly, the guideline value on the date of agreement is Rs. 90,000/- per cent i.e. Rs. 90 lakh per acre and the assessee has sold the land @ Rs. 1,05,00,000/- per acre, therefore, the AO, in our opinion, is not justified in adopting the guideline value as on 31.3.2014 that to in sq. foot. Assessee appeal allowed.
Issues Involved:
1. Delay in filing of the appeal by the Revenue. 2. Validity of reassessment proceedings. 3. Correctness of the Long-Term Capital Gain (LTCG) calculation. 4. Applicability of section 50C of the Income Tax Act, 1961. Summary: 1. Delay in filing of the appeal by the Revenue: The Tribunal condoned the 22-day delay in filing the appeal by the Revenue after considering the reasons provided in the condonation application and hearing both sides. 2. Validity of reassessment proceedings: The assessee challenged the reassessment proceedings on the grounds that they were based on an audit objection and lacked proper application of mind. The Tribunal dismissed these grounds as not pressed by the assessee's counsel. 3. Correctness of the Long-Term Capital Gain (LTCG) calculation: The assessee had declared LTCG from the sale of 2.92 acres of land for Rs. 3.10 crores. The Assessing Officer (AO) recalculated the LTCG based on the guideline value of Rs. 1200 per sq. ft., resulting in a significantly higher LTCG and an addition of Rs. 12,16,34,240/- to the total income. The CIT (A) directed the AO to exclude the area allocated for roads and parks from the calculation, reducing the LTCG. The Tribunal found merit in the assessee's contention that the land sold was undeveloped and should be valued per acre, not per sq. ft. The Tribunal directed the AO to accept the sale consideration of Rs. 3.10 crores as declared by the assessee. 4. Applicability of section 50C of the Income Tax Act, 1961: The Tribunal agreed with the assessee that the provisions of section 50C, as amended by the Finance Act, 2016, should be applied retrospectively. The guideline value on the date of the agreement (Rs. 90 lakhs per acre) should be used instead of the value on the date of registration (Rs. 1200 per sq. ft.). The Tribunal cited various case laws supporting the retrospective application of beneficial amendments and concluded that the AO should adopt the value as per the agreement date. Conclusion: The Tribunal allowed the appeal filed by the assessee, directing the AO to accept the declared sale consideration of Rs. 3.10 crores. Consequently, the Revenue's appeal was dismissed as infructuous.
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