RASMEET SINGH MALHOTRA,PIPARIYA vs. DCIT (CENTRAL CIRCLE)-2,BHOPAL, BHOPAL

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 23.09.2025 passed by learned Commissioner of Income-Tax (Appeals)-3, Bhopal [“CIT(A)”], which in turn arises out of assessment-order dated 06.12.2019 passed by learned DCIT, Central Circle-2, Bhopal [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on following grounds:

“1.That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the Assessing Officer in computing the share of the appellant in sale consideration at Rs. 42,50,000/- (Rs. 85,00,000/2) as against actual share of the appellant in sale consideration of Rs. 42,00,000/- (Rs. 84,00,000/2) Page 1 of 4

Rasmeet Singh Malhotra ITA No. 979/Ind/2025 – AY 2017-18 without properly appreciating the facts of the case and submissions made before him.” 2. The grievance of assessee in present case is very small and so also the

underlying facts. The assessee, as joint owner having ½ share, sold an

immovable property during the year. The actual sale consideration received

from purchaser was Rs. 84,00,000/- (assessee’s ½ share – Rs. 42,00,000/-)

whereas the valuation done by stamps authority was Rs. 85,00,000/-

(assessee’s ½ share – Rs. 42,50,000/-). While the assessee computed

taxable capital gain by taking Rs. 42,00,000/- as full value of consideration,

the lower authorities invoked section 50C and adopted Rs. 42,50,000/-. The

assessee is aggrieved by action of lower authorities.

by Parliament through Finance Act, 2018 w.e.f. 01.04.2019, reading as

under:

“Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purpose of section 48, be deemed to be the full value of the consideration.” 4. Ld. AR submitted that the difference in present case is just Rs.

50,000/- which is very much within the safe harbour limit of 5% permitted

in above Proviso. In so far as the applicability of above Proviso to AY 2017-

18, with which we are concerned in this appeal, Ld. AR relied upon following

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Rasmeet Singh Malhotra ITA No. 979/Ind/2025 – AY 2017-18 decisions wherein it has been held that the Proviso, though introduced

subsequently through Finance Act, 2018, would apply retrospectively from

01.04.2003 i.e. when the section 50C itself was introduced in statute:

(i) ITAT, Mumbai in Maria Fernandes Cheryl Vs. ITO, (2021) 123

taxmann.com 252 (Mumbai – Trib.)

(ii) ITAT, Mumbai in Assistant Commissioner of Income-tax Vs. Sunil B

Dalal, (2022) 145 taxmann.com 313 (Mumbai – Trib.)

(iii) ITAT, Surat in Girdharbhai Haribhai Gajera Vs. ITO, (2023) 149

taxmann.com 463 (Surat – Trib.)

in the light of provision of section 50C and above-mentioned case laws. In

above mentioned decisions, it has been held that the 3rd Proviso to section

50C(1), as introduced by the Finance Act, 2018, operates retrospectively

with effect from 01.04.2003, i.e., the date on which section 50C itself was

brought on the statute. The legislative intent behind the said Proviso is to

provide a safe harbour to assessee where the difference between the actual

sale consideration and the stamp duty valuation does not exceed 5% of the

actual sale consideration. In present case, the actual sale consideration

(assessee's ½ share) was Rs. 42,00,000/- whereas the stamp duty valuation

(assessee's ½ share) was Rs. 42,50,000/-. The difference of Rs. 50,000/-

works out to approximately 1.19% of the actual sale consideration, which is

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Rasmeet Singh Malhotra ITA No. 979/Ind/2025 – AY 2017-18 well within the safe harbour limit of 5% prescribed under the said Proviso.

Therefore, in the light of decisions, we agree that the invocation of section

50C by the lower authorities and adoption of Rs. 42,50,000/- as the full

value of consideration, is not sustainable in law. Accordingly, we direct the

AO to adopt Rs. 42,00,000/- as the full value of consideration for computing

the capital gains in the hands of the assessee. Necessary computation shall

be done by AO. The ground of appeal raised by the assessee is thus allowed.

Order pronounced in open court on 17/04/2026

Sd/- Sd/-

(PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Indore

िदनांक/Dated : 17/04/2026

Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E COPYAssistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore

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