SMT. RAJESWARI IYER,CHENNAI vs. ITO, INTERNATIONAL TAXATION-1(2), CHENNAI

आयकर अपीलीय अधिकरण, ‘डी’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI श्री जॉजज जॉजज के, उपाध्यक्ष एवं श्री एस.आर.रघुनाथा, लेखा सदस्य के समक्ष BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3751/Chny/2025 ननिाारण वर्ा / Assessment Year : 2014-15 आयकर अपील सं./ITA No.3752/Chny/2025 ननिाारण वर्ा / Assessment Year : 2013-14 Smt.Rajeswari Iyer The Income Tax Officer 6/19, Chitharanjan Road, vs. International Taxation 1(2) Alwarpet Chennai. Teynampet, Chennai – 600 018. [PAN: ACEPI7246J] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/Appellant by : Shri. G.Baskar, Advocate प्रत्यर्थी की ओर से/Respondent by : Shri. Jenaradhanan, CIT सुनवाई की तारीख/Date of Hearing : 10.06.2026 घोर्णा की तारीख/Date of Pronouncement : 08.07.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : These two appeals have been preferred by the Assessee against two separate orders both dated 29.08.2025 passed by the Learned Commissioner of Income Tax, Appeal, CIT(A), Chennai – 16, [hereinafter referred to as “the Ld. CIT(A)”], arising from the assessment orders dated 31.03.2016 and 30.12.2016 passed by the Income Tax Officer, International Taxation 1(2),

:-2-: ITA. Nos:3751 & 3752/Chny/2025 Chennai Assessment Unit, [hereinafter referred to as “the AO”], u/s.143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the Assessment Years 2013-14 and 2014-15 respectively.

A.Y.2013-14 – ITA No.3752/Chny/2025 Issue Ground Value Income from LTCG – With regard to Land sold 1. 5 Rs.2,05,87,500/- at Varadharajapuram Village Income from LTCG – With regard to Land sold 2. 6 Rs.3,18,24,500/- at Kundrathur Village Cost Inflation Index - With regard to Land sold 3. at Varadharajapuram, Kundrathur and 7 Rs.19,60,423/- Nedungundram Village Rs.10,96,984/ Brokerage – With regard to Land sold at 4. 8 (96,984 + Varadharajapuram and Kundrathur Village 10,00,000) Income from Other Sources – With regard to 5. sale consideration on account of sale of land 9 Rs.83,16,000/- situated at Nedungundram Village

A.Y.2014-15 – ITA No.3751/Chny/2025 # Issue Ground Value Income from LTCG – With regard to adoption of Rs.10,48,80,600 1. Guideline Value of properties situated at 2 to 6 /-(8,36,16,280 + Kundrathur 2,12,64,320) Cost Inflation Index – With regard to sale of 2. 7 Rs. 20,87,680/- properties situated at Kundrathur Brokerage – With regard to sale of properties 3. 8 Rs. 5,53,016/- situated at Kundrathur Cost of Improvement – With regard to sale of 4. 2 to 6 Rs. 4,00,000/- property at Ashok Nagar

:-3-: ITA. Nos:3751 & 3752/Chny/2025 relevant to the A.Y.2013-14, sold land to an extent of 6.81 Acres at Varadharajapuram Village to M/s.Tatia Developers (“Tatia” in short), for a total consideration of Rs.8,01,84,500/-. The assessee’s share in these lands was 50% (i.e.) 3.41 Acres, which were sold vide agreements dated 28.06.2012 and 18.02.2013. Her share of the consideration amounted to Rs.4,00,92,250/-, which she had declared in her ROI. 4. The Ld. AR submitted that originally, these lands were owned by the assessee’s father, Mr.Balasubramaniam. He had entered into an oral agreement with the purchaser, Tatia, for sale of these lands, and in pursuance to the same, Tatia paid an advance of Rs.50,00,000/- to the assessee’s sister, Mrs.Uma Shankar vide cheque no.73836 dated 11.01.2012 of the HDFC Bank. The Ld.AR submits that after entering into an agreement, Mr.Balasubramaniam had passed away on 15.01.2012. However, to fulfil the agreement entered into between the assessee’s father and Tatia, the assessee and her sister agreed to sell the lands which they now inherited, to Tatia, on the terms agreed to between Tatia and their father. 5. During the assessment proceedings, the AO noted that the agreement for sale vide which the sale was completed was dated 28.06.2012, and that the Stamp Value or Guideline Value (GLV) on the date of sale was Rs.13,54,77,360/-, of which the assessee’s share was Rs.6,77,38,680/-. The AO thus proposed to adopt the GLV as gross consideration for the purpose of computation of capital gains by applying the provisions of section 50C of the Act. The assessee contested the same by stating that the agreement to sell the land was reached prior to 01.04.2012, on which date the GLV stood revised. The GLV for the period in which the agreement was reached was Rs.8.96 per sq.ft. and thus the sale consideration agreed was much more than the GLV. 6. The Ld.AR referred to the assessee’s reply dated 09.09.2015 submitted to the AO at page 76 of the paperbook for the A.Y.2013-14 and also to the submissions dated 09.12.2015 before the DVO at page 83 of the same

:-4-: ITA. Nos:3751 & 3752/Chny/2025 paperbook. The assessee had also requested that if the AO wanted to proceed with the proposal, to first refer the valuation of the land prior to January, 2012 to the valuation cell. However, the AO referred the case to the valuation cell vide his letter dated 22.09.2015 to arrive at the fair market value as on the date of actual sale (i.e.) after 01.04.2012. However, only a preliminary report dated 22.03.2016 was furnished. The assessee placed her objections firstly on the date on which the value was to be arrived at and secondly on the various aspects of valuation. No final valuation report was furnished by the DVO. The AO proceeded to adopt the market value as estimated in this preliminary report, which was at Rs.3,10,23,500/-, and proceeded to add the differential sum of Rs.2,05,87,500/- to the assessee’s capital gains. 7. Challenging this addition, in the appeal filed before the ld.CIT(A), the assessee again submitted that the agreement to sell the lands having been reached between the assessee’s father and Tatia prior to revision of GLV on 01.04.2012, adoption of the GLV after that date was incorrect. However, the ld.CIT(A) rejected the assessee’s contention for the reason that there was no evidence submitted to prove the existence of such agreement and also that the proviso 1 and 2 of section 50C of the Act, providing for adoption of GLV as on date of agreement as opposed to date of sale, was only prospective in nature and would not apply for the year under consideration. The ld.CIT(A) also upheld the adoption of the Fair Market Value (FMV) by the AO on the basis of the preliminary valuation report for the reason that the value as per this report was lesser than the GLV proposed to be applied by the AO and thus the same being beneficial to the assessee, the AO can’t be faulted for adoption of this value. 8. Aggrieved by the order of the ld.CIT(A) the assessee is in appeal before us. The Ld.AR took us through the agreement for sale of land at Varadharajapuram Village to Tatia wherein the advance payment vide cheque as noted at para 4 above stood reflected. He also furnished copy of the bank statement of Tatia evidencing the payment. He also referred to a confirmation from the purchaser that they had agreed to purchase the lands from

:-5-: ITA. Nos:3751 & 3752/Chny/2025 Mr.Balasubramanian and after his demise, they purchased the same from his legal heirs (i.e.) the assessee and her sister. All these evidences, the ld.AR stated have been submitted before the ld.CIT(A) also. 9. The Ld. AR initially contended, referring to the scheme of the Act and the Wealth Tax Act that in the absence of a final valuation, the AO was bound to accept the sale consideration declared by the assessee and the AO’s action in adopting the rate as per the preliminary report was incorrect. He thus prayed to delete the addition on this ground alone. With regard to the adoption of the GLV after 01.04.2012, he contended that there being an agreement in existence between the assessee’s father and Tatia prior to 01.04.2012, and an amount of Rs.50,00,000/- having been received via cheque prior to 01.04.2012, the conditions for application of 1st proviso to section 50C of the Act stood satisfied. He thus submitted that adoption of the GLV after 01.04.2012 was incorrect and the sale price ought to be compared with the GLV prior to 01.04.2012, to see whether the provisions of section 50C of the Act, for adoption of higher sale consideration, warrant application. 10. On the other hand, the Ld.DR submitted that the AO had rightly adopted the value as per the preliminary report. He firstly submitted that the proviso to section 50C of the Act, which provides for adoption of GLV as on date of agreement, prior to date of sale, was inapplicable to the present appeals as both the provisos were introduced w.e.f. 01.04.2017 and the appeals at hand were for the A.Ys.2013-14 and 2014-15. He further supported the orders of the AO and the ld.CIT(A) by stating that there was no agreement between the assessee’s father and Tatia. 11. The Ld.AR then brought to our attention, the decision of the Hon’ble Madras High Court in the case of CIT vs. Vummudi Amarendran - [2020] 429 ITR 97 (Madras), wherein the Jurisdictional Court had held that the proviso to section 50C of the Act being curative and beneficial in nature, having been brought to remove the hardships faced, is retrospective in operation. He thus

:-6-: ITA. Nos:3751 & 3752/Chny/2025 submitted that the advantage of the proviso to section 50C of the Act was very much applicable to the present case. 12. We have heard the rival submissions perused the documents on record and the orders of the lower authorities along with the judicial precedents relied on. We firstly hold that the benefit of the 1st proviso to section 50C of the Act is very much applicable to these appeals as the proviso has been held to be retrospective in operation by the Hon’ble Madras High Court in Vummudi Amarendran (supra). The 2nd proviso to section 50C of the Act states that the benefit of the 1st 13. proviso would apply only in a case where the consideration or part thereof is received through banking modes. The relevant provisions of section 50C of the Act are extracted here; 50C - Special provision for full value of consideration in certain cases. (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer : Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account, on or before the date of the agreement for transfer. 14. As can be seen from the provisos, the 1st proviso only talks about an agreement fixing the amount of consideration. It does not mandate for such agreement to be reduced to writing. In such a case, even an oral agreement

:-7-: ITA. Nos:3751 & 3752/Chny/2025 fixing the price would come within the purview of the agreement referred to in the 1st proviso to section 50C of the Act. The Ld.AR also placed before us a decision of the Hon’ble Supreme Court in the case of K.Nanjappa Vs. R.A. Hameed alias Ameersab – Civil Appeal No.8224 OF 2003 (Supreme Court), wherein the Hon’ble SC had in the context of Contract and Specific Relief, held that an oral agreement / contract was valid and a decree for specific performance can be granted on the basis of the same. Thus, we agree with the Ld.AR’s contention that an oral agreement satisfies the condition of the 1st proviso. 15. Coming to the 2nd proviso, which mandates for payment of consideration or part thereof to be made via banking channels on or before the date of agreement, we observe that the purchaser, Tatia, had duly paid a sum of Rs.50,00,000/- via cheque dated 11.01.2012 of HDFC Bank. 16. From the above, it can be seen that the conditions laid down in the 1st and 2nd provisos to section 50C of the Act have been duly satisfied in the present case. This being the case, the GLV as on the date of agreement has to be taken for the purpose of section 50C of the Act, if any. From the submissions made before the AO, we observe that the GLV of the property prior to 01.04.2012 (i.e.) for the period between 01.08.2007 and 31.03.2012 was Rs.8.96 per sq.ft. whereas the sale consideration declared by the assessee as per the sale agreements was Rs.270/- per sq.ft. 17. The AO as well as the DVO had not disputed the figure of GLV stated by the assessee. In the submissions made before the AO, more than once, the assessee has stated this figure of GLV before 01.04.2012. Even in the objections to the preliminary valuation reports, the assessee had placed before him the guidelines value prior to 01.04.2012. Thus, the figure of GLV as on the date of agreement remains uncontroverted. We have no hesitation in accepting the submissions of the assessee and hold that section 50C would not apply to the facts of the case as the sale price was higher than the GLV.

:-8-: ITA. Nos:3751 & 3752/Chny/2025 18. We now take up the addition made to the LTCG u/s.50C of the Act in relation to the lands sold at Kundrathur. The Ld.AR submitted that the assessee and her sister sold land of a total extent of 6.07 Acres at Kundrathur during the F.Y.2012-13 relevant to the A.Y.2013-14 to one Mr.S.Dhanasekaran and his wife Mrs.D.Sasirekha. These lands were originally owned by the assessee’s parents. On her mother’s demise, the assessee, her father and her sister each got a third of her share. The assessee’s father then entered into an oral agreement with Mr.S.Dhanasekaran and his wife for selling the lands at Kundrathur and also agreed to the price for selling the same. In pursuance of the said agreement, the assessee’s father received a total sum of Rs.1,30,00,000/- from Mr.S.Dhanasekaran and his wife on various dates between 09.11.2010 and 08.07.2011. In fact, the assessee herself received certain sums of money from the purchasers on various dates starting from 14.02.2011. the details of the advance received is tabulated in page 88 of the paperbook for the A.Y.2013-14. However, before the sale fructified, the assessee’s father passed away on 15.01.2012. The Ld.AR thus submitted that, similar to the land at Varadharajapuram Village, the assessee and her sister decided to sell the lands at the terms agreed to between their father and the purchasers. 19. The lands were sold vide 3 separate agreements by the assessee. One of the 3 agreements was entered into during the F.Y.2012-13 relevant to the A.Y.2013-14, on 03.08.2012. The other two agreements were entered into in the next year on 13.12.2013, which are subject matter of addition in the next year i.e A.Y 2014-15. During this year, the assessee and her sister sold 6.07 Acres of land, of which the assessee’s share of consideration amounted to Rs.4,34,00,000/-, which came to Rs.328/- per sq.ft. The LTCG from the sale of these lands was declared in her ROI. During the assessment proceedings, the AO proposed to adopt the GLV of the said lands on the date of the written agreement (i.e.) 03.08.2012 at Rs.8,80,61,943/-. Similar to the land at Varadharajapuram Village, the assessee objected to the same and requested

:-9-: ITA. Nos:3751 & 3752/Chny/2025 for reference to the DVO. And here also, the DVO submitted only a preliminary valuation report but did not furnish a final valuation. As per the preliminary valuation report, the value of the land was arrived at Rs.7,52,24,500/-. The AO proceeded to add the difference of Rs.3,18,24,500/- to the assessee’s capital gains. 20. Challenging this addition, in the appeal filed before the ld.CIT(A), the assessee again submitted that the agreement to sell the lands was reached between the assessee’s father and the purchasers prior to revision of GLV on 01.04.2012, and thus the adoption of the GLV after the said date was incorrect. However, the ld.CIT(A) rejected the assessee’s contention on the same grounds as for the rejection in the case of the lands at Varadharajapuram Village. 21. On appeal to the Tribunal, the Ld.AR took us through the bank statement of the assessee’s father reflecting the receipt of a sum of Rs.1.30 Crores from the purchasers, well before 01.04.2012 and confirmation from the purchasers that the agreement to purchase the lands and the rate of purchase was agreed with the assessee’s father before his demise. He thus submitted that the fact of an agreement being reached between the assessee’s father and the purchasers well before 01.04.2012 had been duly proved and a substantial portion of the sale consideration had been received via bank. He submitted that the 1st proviso to section 50C of the Act was applicable even for this transaction and that the GLV of the lands prior to revision on 01.04.2012 stood at Rs.259/- per sq.ft., which was less than the sale value at Rs.328/- per sq.ft. He thus prayed for deletion of the addition u/s.50C of the Act as the same was unwarranted. 22. The Ld.DR raised similar arguments to this transaction as for the transaction in relation to the lands at Varadharajapuram Village. 23. We have heard the rival submissions perused the documents on record and the orders of the lower authorities along with the judicial precedents relied

:-10-: ITA. Nos:3751 & 3752/Chny/2025 on. Similar to the transaction in relation to the lands at Varadharajapuram Village, here also the assessee and her father have received a portion of the sale consideration well before 01.04.2012, in pursuance of the oral agreement, the existence of which has been confirmed by the purchasers also. The purchasers have even given another confirmation before the ld.CIT(A) by tabulating the payments made to the assessee’s father. All these facts go on to prove that the assessee’s father had indeed reached an agreement with the purchasers for the lands at Kundrathur. Also, payments having been received via bank, the 1st proviso to section 50C of the Act is clearly attracted in relation to this transaction also. From the submissions made before the AO and the DVO at page 91 of the paperbook for the A.Y.2013-14, we observe that the GLV of the property prior to 01.04.2012 (i.e.) for the period between 01.08.2007 and 31.03.2012 was Rs.259/- per sq.ft. whereas the sale value declared by the assessee as per the sale agreements was Rs.328/- per sq.ft. 24. In respect of this transaction as well, the AO and the DVO have not disputed the figure of GLV stated by the assessee. In the submissions made before the AO, more than once the assessee has stated this figure of GLV before 01.04.2012. The Ld.AR submitted that the GLV figures are also available on the Government Website and that the same have been furnished before the AO. Thus, the figure of GLV as on the date of agreement remains uncontroverted. We have no hesitation in accepting the submissions of the assessee in this transaction also and hold that section 50C would not apply to the facts of the case, as the sale price was higher than the GLV. 25. As noted above, a portion of the lands at Kundrathur were sold in the next year (i.e.) the F.Y.2013-14 relevant to the A.Y.2014-15, vide 2 agreements dated 13.12.2013. These lands were also sold in pursuance to the oral agreement entered into between the assessee’s father and the purchasers. Thus, the benefit of the 1st proviso to section 50C of the Act is also applicable for this year. We thus allow the grounds of appeal on this issue for the A.Y.2014- 15 in ITA No.3751/Chny/2026 also.

:-11-: ITA. Nos:3751 & 3752/Chny/2025 26. The Ld. AR submitted that the grounds relating to the Cost Inflation Index (ground No. 7 in both ITA Nos. 3752/2025 & ITA No. 3751/2025) are not pressed as the ld.CIT(A) had already remanded the same to the AO for verification. Similarly, the Ld. AR did not press the grounds relating to Brokerage expenses (ground No. 8 in both ITA Nos. 3752/2025 & ITA No. 3751/2025) as the ld.CIT(A) had only remanded the issue to the AO for verification. Hence, we dismiss the relevant grounds. 27. The sole ground which now survives for consideration is ground no.9 for the A.Y.2013-14, which is as below; 9. Addition as income from other sources: 9.1. The CIT(A) erred in upholding the addition of Rs.83,16,000/- as the appellant’s income from other sources. 9.2. The sum having been received by the appellant only in connection with the sale of the land, the same had been rightly considered as sale consideration and capital gains from the same having been offered to tax, the CIT(A) grossly erred in confirming the AO’s action of treating it as income from other sources. 28. The assessee had contended before the ld.CIT(A) that this sum was excess consideration received by the assessee and her sister, half of which was included as sale consideration and capital gains from the same had been declared in her ROI. The assessee challenged the AO’s action in treating the said sum as her income from other sources instead of capital gains. Before us, the Ld.AR did not seriously challenge such treatment, but he confined his plea that only Rs.41,58,000/- was the assessee’s share and that alone could be treated as income from other sources and not Rs.83,16,000/- as done by the AO and confirmed by the ld.CIT(A). 29. On perusal of the submissions and records, we deem fit to remit this issue to the AO only to verify, if the assessee’s share was Rs.41,58,000/- only as claimed by the assessee or any other figure. Accordingly, this ground of the assessee is partly allowed.

:-12-: ITA. Nos:3751 & 3752/Chny/2025 30. In the result both the appeals of the assessee are partly allowed for statistical purposes, Order pronounced in the court on 08th July, 2026 at Chennai.

Sd/- Sd/- (जॉजा जॉजा के) (एस. आर. रघुनार्था) (GEORGE GEORGE K) (S. R. RAGHUNATHA) उपाध्यक्ष /VICE PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनांक/Dated, the 08th July, 2026. Devadas आदेश की प्रनतललपप अग्रेपर्त/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. पवभागीय प्रनतननधि/DR 5. गाडा फाईल/GF DEVADAS Digitally signed by DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.07.09 17:09:19 +05'30'