PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3, DELHI vs. SHARAN SVADHA LLP

The Department has assailed the validity of the judgment rendered by the Income Tax Appellate Tribunal [“ITAT”] dated 11 October 2022. 2. The issue itself arises out of the invocation of Section 50C of the Income Tax Act, 1961 [“Act”] against the respondent / assessee in respect of a transaction relating to an immovable property to which it was a party. Undisputedly, the respondent / assessee had purchased the subject property for an amount of Rs.7,84,00,000/-. The respondent / assessee took into consideration the fact that the stamp duty paid in respect of that transaction was amounting to Rs.12,34,00,000/-. It was perhaps on that basis that the Department proceeded on the premise that Section 50C of the Act would be applicable. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/12/2024 at 15:08:10

The ITAT has found that the aforesaid provision has been wrongly invoked bearing in mind the fact that it would apply only to an assessee who has received consideration or to whom consideration may have been paid as a result of the transfer of a capital asset. 4. Section 50C of the Act thus, on its plain language, is clearly concerned with the vendor or the seller of the property in question. The said provision can have no application to a purchaser. 5. In view of the aforesaid, we find no merit in the instant appeal. Consequently, the appeal fails and shall stand dismissed.