V. VIJAYALAKSHMI,CHENNAI vs. ITO, NCW-15(1), CHENNAI

आदेश / O R D E R PER ABY T. VARKEY, JM:

This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as the ‘Ld.CIT(A)’), Delhi dated 10.02.2026 for the Assessment Year (hereinafter referred to as the ‘AY‘) 2013-14.

ITA No. 1033 /Chny/2026 (AY 2013-14) V.VIJAYALAKSHMI :: 2 :: noted that the assessee did not file any submissions before him which led to him to set aside the assessment back to the file of AO for de novo assessment, according to the Ld.AR, the action of the Ld.CIT(A) is erroneous, since the assessee had filed the written submissions along with relevant documents before the Ld.CIT(A) on 29.11.2024. Hence, he assailed the action of the Ld. CIT (A) in not deciding the ground of appeal before him in accordance with sub-section (6) of section 250 of the Income Tax Act (hereinafter of “the Act”). Further, according to the Ld.AR, the sole issue in this case is whether the guideline value as on date of agreement or guideline value as on date of execution of conveyance deed is to be considered for the purpose of applying the section 50C of the Act. According to the Ld.AR, this issue is no longer res-integra and pointed that one of the co-owners of the property in question had come before this Tribunal (ITA No.2022/Mds/2017 AY 2013-14 through Shri M. C. Rajendran Vs. ITO order dated 01.11.2017), which was decided. According to the Ld.AR, even though this relevant fact was brought to the notice of the Ld. CIT (A), still he brushed it aside and erred in setting the issue back to the file of AO for de novo assessment. Therefore, he prayed that the issue raised by the assessee in this ground of appeal (supra) to be decided on the same lines as that of the Co-owner of the same property in question.

ITA No. 1033 /Chny/2026 (AY 2013-14) V.VIJAYALAKSHMI :: 3 :: assessee along with 11 other co-owners had entered into sale transaction of immovable property at 80 feet Scheme Road, Saligarmam, Tamil Nadu for a total consideration of Rs.1,17,00,000/- on 07.12.2012 which has a market value of Rs.7,26,96,000/- and since the property is capital asset, provision of section 50C of the Act was attracted and share of the assessee is 10% viz Rs.72,69,600/- and assessee has not filed her return of income for AY 2013-14, the AO reopened the assessment of the assessee by issuing notice u/s 148 on 26.03.2019 which was served by way of affixture. Pursuant to the same, assessee filed her return of income on 04.09.2021 declaring total income at Rs.1,48,060/- and has shown long term capital loss of Rs.21,096/- in her ITR. The AO is noted to have issued statutory notices asking the assessee as to why section 50C should not be applied and the sale consideration decided by the stamp valuation authority should not be adopted for the purpose of computing capital gain under section 48 of the Act. Finding no proper response, the AO is noted to have added long term capital gain at Rs.60,78,504/- after allowing cost of acquisition as claimed in the return of income of Rs.11,91,096/- (Rs.72,69,600/- – Rs.11,91,096/- i.e. Rs.60,78,504/-) and computed the total income of the assessee at Rs.62,26,560/- in place of returned income of Rs.1,48,060/-. On appeal, the assessee, even though brought to the notice of the Ld.CIT(A) that the issue in question is covered by the order of this Tribunal in the case of one of the Co-owner of the same property, still the Ld.CIT(A) refused to follow it, and instead, restored the assessment back to the file of the AO. Hence the assessee is noted to have assailed such an action of Ld CIT(A) and pointed out that such a course of action was unwarranted, since the issue involved is no longer res-integra. We find considerable force in the submission of assessee and note that out of the eleven co-owners who sold the property in question, one of the co-owners of the property [Shri M.C.Rajendran (supra)] had come before this Tribunal, wherein similar

ITA No. 1033 /Chny/2026 (AY 2013-14) V.VIJAYALAKSHMI :: 4 :: action was made by AO/CIT(A) and the Tribunal is noted to have held as under:-

Limited issue raised by the assessee in this appeal, which is directed against an order dated 23.06.2017 of ld. Commissioner of Income Tax (Appeals)-4, Chennai is whether guideline value as on date of agreement or guideline value as on date of execution of conveyance deed is to be considered for the purpose of applying Sec. 50C of the Income Tax Act, 1961 (in short ‘’the Act’’). Though there are certain grounds other than the above in the appeal, ld. Counsel for the assessee at the outset submitted that he was limiting his argument to the issue first mentioned above. 2. Facts apropos are that assessee a freelance real estate consultant had filed his return of income for the impugned assessment year declaring an income of ₹1,94,070/-. Ld. Assessing Officer was having information from the SRO, Virugambakkam, that assessee along with fourteen of his family members had sold a property for a consideration of ₹7,26,96,000/- on 27.12.2012 through a document registered as 7057/2012. Total area sold was 4.66 grounds of which assessee’s share was 10%. Since assessee had not shown any income under the head Capital gains, ld. Assessing Officer required the assessee to explain why the above transaction was not shown by him in the return of income. Explanation of the assessee was that the property in question was inherited by him along with his family members, from his father on latter’s death. As per the assessee, the property was being illegally occupied by certain persons and assessee and other co-owners did not succeed in their efforts to vacate the unauthorized occupants. Therefore as per assessee, they decided to sell the property in distress. As per the assessee he along with co-owners had entered with an agreement with one Shri.S. Nagarjan on 27.11.2011 to sell the entire land for a consideration of ₹7,00,00,000/- and they had collectively received ₹70,00,000/- by crossed account payee cheques dated even. As per the assessee registration of the sale deed was done by the buyer only on 27.12.2012. Assessee also submitted before the ld. Assessing Officer that guideline value as on date of sale agreement viz was 27.11.2011 was only ₹2,100/- per sq.ft. Contention of the assessee was that guideline value increased to ₹8,000/- per sq.ft. only on 01.04.2012. Thus, as per the assessee even if guideline value was considered for ascertaining the full value of the consideration such value as on 27.11.2011 alone could be applied. 3. However, ld. Assessing Officer was not impressed by the above arguments. According to him, the value to be adopted was based on stamp duty paid by the purchaser. As per the ld. Assessing Officer, the stamp duty paid by the purchaser was on a sum of ₹7,26,96,000/-. Though the ld. Assessing Officer made a reference to the District Valuation Officer, he completed the assessment without waiting for the report of District Valuation Officer and adopted the value of ₹7,26,96,000/- taken for stamp duty purposes as on date of registration of the sale deed. Capital gains was worked out considering 10% thereof being the share which belonged to the assessee, after deducting indexed cost of acquisition. 4. Aggrieved, assessee moved in appeal before the ld. Commissioner of Income Tax (Appeals). Contention raised by the assessee was once again on the issue of date of guideline value. According to him, date of entering into the agreement for sale viz 27.11.2011 had to be adopted for ascertaining the guideline value and not date on which sale deed was executed and registered. According to the assessee, sale deed was registered on 27.12.2012 whereas agreement for sale was entered on 27.11.2011. As per the assessee only the former date could be considered for ascertaining the guideline value and applying Sec. 50C of the Income Tax Act, 1961 (in short ‘’the Act’’). 5. However, ld.CIT(A) was not impressed by the above arguments. According to him, Finance Act, 2016 had inserted a proviso below Sec. 50C of the Act which authorized

ITA No. 1033 /Chny/2026 (AY 2013-14) V.VIJAYALAKSHMI :: 5 :: adoption of guideline value as on the date of agreement for sale for ascertaining the full value of consideration. As per the ld. Commissioner of Income Tax (Appeals) this amendment came into effect only on 01.04.2017. According to him, prior to the said date, guideline value as on date of registration of the sale deed alone could be considered for applying Sec.50C of the Act. Taking this view, he dismissed the appeal of the assessee. 6. Now before us, ld. Authorized Representative strongly assailing the orders of the lower authorities submitted that date of entering into the agreement for sale was 27.11.2011 whereas the sale deed finally executed only in December, 2012. According to him, the amendment made by Finance Act, 2016 through which a proviso was inserted u/s. 50C of the Act, had to be given retrospective effect since such amendment was clarificatory in nature. Ld. Authorized Representative also placed reliance on the decision of Co-ordinate Bench of the Tribunal in the case of Upendra Maheshwari vs. ITO (ITA No.1900/Mds/ 2016, dated 05.01.2017). 7. Per contra, ld. Departmental Representative submitted that proviso could not be given retrospective effect since legislature had specifically stated it to be applicable only from 01.04.2017. 8. We have considered the rival contentions and perused the orders of the authorities below. What we find is that a similar issue had come up before this Tribunal in the case of Upendra Maheshwari (supra). This was prior to the introduction of first proviso to Sec.50C (1) of the Act by Finance Act, 2016. Relevant findings of the Tribunal as it appears at paras 8 & 9 of the order dated 05.01.2017 is reproduced hereunder:- ‘’8. In this case as on 10.02.2007, the guideline value of the property was not more than ₹80,15,000/-, the price agreed between the parties. On 01.08.2007 the guideline value was revised to ₹1,20,00,000/-. Since the assessee agreed to sell the property for 7 I.T.A. No.1900/Mds/2016 ₹80,15,000/- on 10.02.2007 which is much more than the guideline value which existed on 10.02.2007, this Tribunal is of considered opinion that the Assessing Officer has to accept the sale consideration of ₹80,15,000/- under Section 50C of the Act. In other words, the guideline value which exists on the date of agreement for sale, has to be taken in to consideration for the purpose of determining the fair market value under Section 50C of the Act. Therefore this Tribunal is unable to uphold the orders of the lower authorities. 9. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to accept the sale consideration at ₹80,15,000/- as agreed between the parties in the agreement for sale dated 10.02.2007’’. Thus, the Tribunal had held that guideline value which applied on the date of entering into the agreement for sale had to be considered for determining the fair market value u/s. 50C of the Act. In our opinion, addition of proviso of Sec.50C(1) of the Act through Finance Act, 2016 w.e.f. 01.04.2017 will make no difference. The said proviso is reproduced hereunder:- ‘’(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 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 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’’.

ITA No. 1033 /Chny/2026 (AY 2013-14) V.VIJAYALAKSHMI :: 6 :: Above proviso is obviously clarificatory in nature and not a substantive amendment. We are therefore of the opinion that the position even prior to the introduction of above proviso to Sec. 50C(1) of the Act will not change.

Order pronounced on the 23rd day of June 2026, in Chennai.

Sd/- Sd/- (इंटूरी रामा राव) (एबी टी. वक�) (INTURI RAMA RAO) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 23rd June, 2026. KB आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

Digitally signed YASHVI by YASHVIR SINGH R SINGH Date: 2026.07.08 16:51:52 +05'30'