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Income Tax Appellate Tribunal, ‘’ A’’ BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV & SHRI WASEEM AHMED
आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-4, Ahmedabad, dated 10/07/2017 arising in the matter of assessment order passed under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2011-2012.
The only issue raised by the assessee is that the Ld. CIT(A) erred in confirming the addition made by the AO for Rs. 24,58,548/- under the provision of section 50C of the Act.
The facts in brief are that the assessee in the present case is an individual and declared his income from the partnership firm, capital gain and other sources. The assessee, along with co-owners, vide agreement dated 29/12/2010 has sold property at Rs. 38,00,000/- only. The share of the assessee in the impugned property stands at 18% only. Accordingly, the assessee has declared sale consideration at Rs. 6,84,000/- only being 18% of Rs. 38,00,000.00 only.
3.1 However, the AO found that the property in dispute for the purpose of Stamp Duty was valued at Rs. 1,74,58,600/- only. Thus the AO was of the view that the assessee should have shown the amount of sale consideration at Rs. 31,42,548/- being 18% of the stamp duty value under the provision of section 50C of the Act against the sale consideration of Rs. 6,84,000/-. Accordingly, the AO enhanced the amount of short term capital gain by Rs. 24,58,548/- and added to the total income of the assessee.
Aggrieved assessee preferred an appeal to the Ld. CIT(A) who confirmed the order of the AO.
Being aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.
The Ld. AR before us filed a paper book running from pages 1 to 219 and contended that there was agreement to sale of the impugned property dated 29/12/2010 for Rs. 38,00,000/- only which is more than the value to be determined for the purpose of the stamp duty as applicable at the time of agreement.
6.1 The ld. AR in support of his contention drew our attention on the agreement to sale which is placed on pages 50 to 70 of the paper book. It was also brought to our notice that the entire amount of sale consideration was received by the assessee within the Financial Year under consideration as appearing in the agreement to sale.
6.2 As per the Ld. AR the value determined by the AO for the purpose of stamp duty was effective from 11/04/2011 which is falling in the Financial Year 2011-12 corresponding to the Assessment Year 2012-13 and therefore same cannot be adopted for the purpose of section 50C of the Act in the year under consideration.
6.3 It was also contended by the ld. AR that the Revenue in the case of other co-owner namely Shri Dharatbhai Prahald Bhai Patel in the assessment framed u/s 143(3) r.w.s 147 of the Act has accepted the stamp duty value declared by him i.e. Rs. 38,00,000.00 only.
6.4 In view of the above the ld. AR submitted that the revised value for the stamp duty cannot be adopted in the year under consideration.
On the other hand Ld. DR, vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. In the case on hand the assessee along with other co-owners has shown the sale consideration of a property for ₹38 lakhs only. The share of the assessee in the property was 18% only. Accordingly, the assessee has calculated the amount of capital gain after taking the amount of sale consideration of Rs. 6,84,000.00 only. As per the assessee, there was the registered agreement to sale dated 29 December 2010 wherein the sale consideration of ₹38 lakhs was shown. The amount of consideration was also received within the financial year under consideration which was reflected in the agreement to sale placed on pages 50 to 70 of the paper book. The assessee also claimed that the sale consideration was greater than the stamp value as applicable for the year under consideration. Consequently, the revised value of the stamp duty effective from the assessment year 2012-13 cannot be adopted by the AO. The revised stamp duty value effective from the assessment year 2012-13 stands at ₹ 1,74,58,600.00 only.
8.1 Based on the above, the controversy that arises for our consideration what should be the stamp duty value as provided under the provisions of section 50C of the Act on the sale of impugned property. The provisions of section 50 C of the Act states that where the consideration received or accruing as a result of transfer of a capital asset being land or building or both is less than the value adopted or assessed or assessable by any authority of the State Government for the purpose of payment of stamp duty in respect of transfer of capital asset, then the value adopted by the stamp valuation authority shall be deemed to be the full value of consideration received or accruing as a result of such transfer.
8.2 Likewise, the proviso to section 50C of the Act stipulates that stamp duty value as on the date of agreement may be considered as sale consideration instead of stamp duty value on the date of 'transfer' of the property. Sale consideration is determined between the parties at the time of entering into the sale agreement, and fair market value of the property as on the date of agreement is thus more relevant for the purpose of application of deeming provision of section50C of the Act. There may be considerable time gap in the date of agreement and the completion of the project and actual 'transfer' of the property. In most of the cases, it may be from 3 years to 10 years. In such cases, there may be considerable increase in the stamp duty value between the date of agreement and the date of transfer of property. Therefore, stamp duty value prevailing on the date of 'transfer' should not be the basis to make comparison with to the agreed sale consideration determined between the parties long ago when the agreement was entered into. However, to safeguard from the menace of entering into backdated sale agreement at lesser value and to ensure that such sale agreement are genuine in nature, second proviso to this section provides that some part of sale consideration should be transacted by banking channel on or before the date of the agreement.
8.3 Coming to the case on hand, there is no dispute to the fact that the assessee has received the consideration in the financial year under consideration and therefore the stamp duty value as applicable at the time of agreement should be adopted as sale consideration for working out the capital gain. Thus the revised Jantry value/ stamp value which came with effect from 11 April 2011 and applicable from the assessment year 2012-13 cannot be adopted as sale consideration for the purpose of calculating the capital gain. To this extent, we disagree with the orders of the authorities below.
8.4 However, at the time of hearing a question was put to the learned AR to provide the stamp duty value as applicable at the time of agreement. However, he failed to bring anything on record but contended that the stamp duty value at the time of agreement was more than the amount of sale consideration shown therein. However, we disagree with the contention of the assessee learned AR of the assessee in the absence of any documentary evidence.
8.5 Before parting, we also find that that there was no addition made in the hands of the co-owner namely Shri Dharatbhai Prahald Bhai Patel on account of the difference in the amount of sale consideration viz a vis stamp duty valuation. For this purpose, the learned AR drew our attention on the assessment order framed under section 143(3) read with section 147 of the Act in the case of Shri Dharatbhai Prahald Bhai Patel which is placed on pages 227 to 229 of the paper book. In other words, the stamp duty valuation as shown by Shri Dharatbhai Prahald Bhai Patel as sale consideration was admitted by the revenue. Accordingly the learned AR contended that same value should also be adopted in the present case. The learned DR at the time of hearing has not brought anything on record against the argument advanced by the learned AR for the assessee. Accordingly we agreed the contention of the learned AR for the assessee. It is because the Revenue is precluded from taking different stand with respect to the different assessee for the common property. Hence, we set aside the finding of the learned CIT (A) and direct the AO to delete the addition made by him. Thus the ground of appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 17/09/2021 at Ahmedabad.