Adoption, Treatment of stamp duty for transfer of land or building or both under Income Tax Act, 1961 during capital gain.
The provisions of S. 50C of Income tax Act, 1961 specifically deals with transactions in immovable properties. It deals specifically about gross consideration in computation of capital gains in respect of transactions in land or building or both.
S. 50C provides that if the value stated by the assessee for the property is less than the value assessed or assessable by the stamp duty authority, the value assessed by the stamp duty authorities will be considered for the computation of the capital gains arising on transfer of land or building or both.
For example, if in the agreement for sale if the value of the property is stated at Rs. 20 lakhs but according to the stamp duty authority the value assessed is Rs. 25 lakhs, then the value of the property for the purpose of computation of capital gains would be Rs. 25 lakhs.
Amendments proposed in S. 50C in tune with the recommendations of the Tax Reforms Panel
S. 50Cof the Act was introduced with effect from April 1, 2003 by the Finance Act, 2002. The purpose of this section was explained thus by the Memorandum to the Finance Bill 2002:
“The Bill proposes to insert a new S. 50C in the Income-tax Act to make a special provision for determining the full value of consideration in cases of transfer of immovable property.
It is proposed to provide that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration, and capital gains shall be computed accordingly under section 48 of the Income-tax Act.”
Controversy relating to deeming fiction introduced in S. 50C
When this provision was introduced the Legislature would not have envisaged that so much of controversy would arise as has happened already. One of the issues which arose before the ITAT Kolkata Bench in the case of Heilgers Development & Construction Co. Pvt. Ltd. vs. DCIT [2013] 32 taxmann.com 147 (Kolkata – Trib.)was that there was a time gap between agreement to sale and actual date of sale within which time the value of the property shot up and the assessee pleaded that the value as stipulated in the agreement to sale be adopted. The Tribunal decided the issue against the assessee in the absence of official confirmation of increase in prices. This issue was identified by the Income Tax Simplification Committee/Tax Reforms Panel (Justice Easwar Committee) and the following suggestion was made to the Government-
“Amendment suggested to S. 50C: The scope of S. 50C was extended w.e.f. A.Y. 2010-11 to the transaction which were executed through agreement to sell or power of attorney. However, the present provisions of S. 50C do not provide any relief where the seller has entered into an agreement to sell the asset much before the actual date of transfer of the immovable property and the sale consideration has been fixed in such agreement. Hence, the Committee has suggested to amend the provisions of S. 50C to provide that where the date of an agreement fixing the value of consideration for the transfer of the asset and the date of registration of the transfer of the asset are not same, the stamp duty value as on the date of the agreement shall be deemed to be the full value consideration of the property. Such provision shall apply only in a case where the amount of consideration or a part thereof has been received by any mode other than cash on or before a date of agreement for transfer of the asset”
Acceptance of this suggestion by the Legislature
Recognizing and realizing the need to overcome such a situation it has been proposed in the Finance Bill,2016 by way of a proviso to S. 50C(1) of the Act to adopt assessed or assessable value by the stamp valuation authority on the date of agreement for the purposes of computing full value of consideration for such transfer provided 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.
These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years.
Related Cases:
S. 50 & 50C of IT Act, 1961—Capital gains—There is no conflict between S. 50 and 50C of the Act. S. 50 is applicable to the claim of depreciation in respect of office premises of the assessee. Therefore, in place of amount shown in the sale deed, adoption of stamp duty valuation is not justified—Panchiram Mahata vs. JCIT (2010) 127 TTJ 128 (ITAT-Kol)
S. 50C of IT Act, 1961—Sale of asset—By paying certain amount, the assessee obtained power of attorney from the owner of the property and made some expenditure on the said property. The amount paid was shown under the head “Loans and advances” in the balance-sheet and not under the head “Fixed assets”. Later on, the said property was sold by a deed of conveyance, in which the assessee represented the owner in capacity of the power of attorney. The assessee claimed set off of the entire income against the earlier years losses and also claimed capital loss on the sale of property. Invocation of the provisions of S. 50C were not warranted as the property was never held by the assessee as capital asset and as per the accounts also the amount given to the owner of the property was shown as loans and advances thereby the property was treated as a business asset and not as a capital asset. Therefore, no question arise to invoke the provisions of S. 50C which pertains to determining the full value of the capital asset—CIT vs. Thiruvengadam Investments Pvt. Ltd. [2010] 320 ITR 345 (Mad)
S. 50C of the Income tax Act, 1961—Capital gain—Briefly, the facts of the case are that during the assessment proceedings, the AO noticed that the assessee has sold the flat No. 6 in Kishori Vihar for Rs. 30 lakhs as per the perusal of tenancy agreement dated 25.05.2004. The market value adopted by the Sub- Registrar of Mumbai was Rs. 33,11,200/-. The AO has taken the market value of the property sold at Rs. 33,11,200/- instead of Rs. 30 lakh as taken by the assessee. Before the AO, it was submitted by the assessee that long term capital gain arising from transfer of tenancy right and not out of the flat No. 6 sold. While deciding the appeal Mumbai Bench of ITAT held that:— “From above discussions I noticed from plain reading of the S. 50C that unless the property transferred has been covered by that S. 50C, that is a capital asset, being land or building or both registered by sale deed and for that purpose the value has been assessed and stamp duty has been paid by the parties, only then S. 50C cannot come into operation. In the case under consideration there is transfer of tenancy right though that is capital asset but not a capital asset, being land or building or both. Therefore, S. 50C is not applicable to the facts of the case under consideration.” Smt. Kishori Sharad Gaitonde, Mumbai vs. ITO, Mumbai [2010] 14 ITCD 103 (ITAT-Bom)
S. 50C & 153(3)(ii) of IT Act, 1961—Capital gains—The Assessing Officer passed assessment order without waiting the valuation report being pending before DVO. Hence, the action of Assessing Officer effected the valuable right of the assessee and, therefore, against such assessment order, writ unders 226 of the Constitution of India is maintainable—N. Meenakshi vs. ACIT [2009] 226 CTR 625 (Mad)
S. 45, 48 & 50C of IT Act, 1961—Capital gains—The basic valuation register prepared and maintained for the purpose of collecting stamp duty cannot form the foundation to determine the market value of the acquired land u/s 23 of the land Acquisition Act, 1894. The valuation done by any State agency for the purpose of stamp duty would not ipso facto substitute the factual sale consideration as being passed on to the seller by the purchaser in the absence of any admissible evidence. Hence, in the absence of any admissible evidence, valuation done by stamp duty authorities cannot be taken as actual sale consideration and the value shown in the sale deed has to be accepted—CIT vs. Chandni Bhuchar (2010) 229 CTR 190 (P&H)
S. 50C of IT Act, 1961—Capital gains—Deeming provisions are to be strictly construed and will not extend to areas other than those to which it is deemed to apply. The deeming provisions presumes an unreal thing as real. Therefore, the provisions of S. 50C of the Act cannot be imported while computing profits and gains of business or profession and in such a situation only the income accruing to the assessee can be taxed u/s 28 of the Act. No addition can be made u/s 50 of the Act on the basis of fair market value arrived at by rent capitalisation method in absence of any material evidence indicating any amount is received over and above sale price and in absence of any finding that consideration received by assessee on sale-in-trade is over and above stated considerations—ACIT vs. Excellent Land Developers Pvt. Ltd. [2010] 1 ITR (Trib) 563 (ITAT-Delhi)
S. 50C and 148 of Income tax Act, 1961—Capital Gain—The main question for consideration was “The Id. CIT (A) erred in law as well as on the facts of the case in confirming the action of the AO in adopting the sale consideration, being the value adopted by the sub-registrar for the purposes of stamp duty at Rs. 60,59,235/- u/s 50C as against Rs. 45 lacs declared by the appellant in the registered sale deed representing the actual sale consideration and thus thereby enhancing the amount of capital gain to Rs. 21,14,059/- as against Rs. 5,54,824/- declared by the appellant, resulting into addition of Rs. 15,59,235/-. The addition so made and confirmed by the CIT(A) being totally contrary to the provisions of law and facts may kindly be deleted in full.” While disposing the appeal the ITAT Jaipur Bench Jaipur held that:—”After considering the submissions and perusing the material on record, we find that in view of provisions of S. 50C(2) the assessee can challenge the valuation adopted by the Stamp Valuation Authority. In support of the case, the assessee had filed Valuation Report from a Registered Valuer. However, the same was not taken into consideration either by the AO or by Id. CIT (A) while deciding the issue. S. 50C(2) provides that where the assessee claimed before any A.O. that the value adopted or assessed (assessable) by the Stamp Valuation Authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer, then the AO may refer the valuation of capital asset to a Valuation Officer……… In the present case the assessee has not accepted the valuation adopted by the Stamp Valuation Authority. Detailed explanation was filed giving reason for not accepting the valuation adopted by the Stamp Valuation Authority supporting with valuation report. However, the Assessing Officer has not considered the same as stated above. The AO simply following the provisions of S. 50C(1) adopted the value taken by Stamp Valuation Authority. The AO should have referred the matter to the Departmental Valuer if he was not satisfied with the explanation or with the Valuation Report obtained from a Registered Valuer by the assessee. Accordingly, we hold that the AO was not justified in accepting the value on the basis of valuation, adopted by Stamp Valuation Authority. In this respect matter should have been restored to the file of AO. However, we have held that issuance of notice u/s 148 was not valid and we have quashed the assessment. Therefore, for this reason the matter is not restored as the same has become academic in nature.” Shri Ashutosh Bhargava, Jhunjhunu, vs. The DCIT, Circle-6, Jaipur [2010] 16 ITCD 133 (ITAT-Jaipur)
S. 50C, 69B, 143(3) of IT Act, 1961—Unexplained investment—Since there is no material to establish that the actual consideration paid by the assessee is higher than what is declared in the sale deed, no addition can be made by invoking S. 50 of the Act—ITO vs. Fitwell Logic System Pvt. Ltd. [2010] 1 ITR (Trib) 286 (ITAT-Delhi)
S. 50C of the IT Act, 1961—Capital gains—S. 50C(1) does not require the Assessing Officer to issue a show cause notice of he assessee before invoking the deeming provisions of S. 50C(1), but if an assessee claims that he did not get a chance to avail of the opportunity provided by the statute under sub-s. (2) of S. 50C, it need not be summarily rejected the Sub-s. (1) of S. 50C is a deeming provision and sub-s. (2) given a concession to the assessee in the form of an opportunity to claim that the value adopted for stamp duty purposes exceeded the fair market value of the property, in which case, the Assessing Officer may refer the valuation to a valuation officer—A. Shaik Mohideen vs. ITO (2009) 123 TTJ 411 (ITAT-Channai)
Income tax Act, 1961,—S. 45, 48 & 50C—Capital Gains—”There is categorical finding recorded by the Commissioner of Income-tax (Appeals) holding that value adopted or assessed by any authority of the State Government for the purpose of payment of stamp duty in respect of land or building cannot be taken as sale consideration received for the purpose of S. 48 of the Act. As against the purchase price disclosed in the sale deed at Rs. 17,06,700, the AO has adopted the purchase price of the property at Rs. 30,32,000, which is assessed for the purpose of paying the stamp duty.” It was held by High Court of P&H that:—”The argument of the learned counsel for the Revenue that the Tribunal should have asked the AO to make a reference to the Valuation Officer u/s 142A of the Act does not require any detailed consideration because CIT(A) had sent the evidence produced by the assessee to the AO for his comments. He conducted an inquiry and asked the assessee-respondent to produce original bank statement. Then he sent a reply to the CIT(A) authenticating the whole transactions. Thereafter the CIT(A) and the Tribunal have accepted sale consideration depicted in sale deed as fact. The assessee-respondent has discharged the burden of proving the sale consideration as projected in the sale deed. Moreover, the learned counsel for the Revenue has not been able to point out that the view taken by the Allahabad High Court in Smt. Raj Kumari Vimla Devi’s case (supra) has been challenged before Hon’ble Supreme Court and the same has been rejected. The aforesaid view seems to have acceptance of the appellant. If that be so then the principle of consistency would require that the aforesaid view be followed as the correct view.” CIT vs. Chandni Bhuchar [2010] 323 ITR 510 (P&H)
S. 2(47)(v) & 50C of IT Act, 1961, S. 53A of Transfer of property Act, 1882—Capital gains—Once, undisputedly, the assessee has handed over the possession of the property to the developer against the payment of share of sale consideration then the property is deemed to have been transferred as per the deeming provisions of S. 2(47). When the conditions of S. 53A are fulfilled irrespective of the fact that it is not absolute transfer by way of execution of sale deed, the transaction is to be completed. Provisions of S. 50C are applicable to transfer of development right in the property—Arif Akhatar Hussain vs. ITO (2011) 140 TTJ 413 (ITAT-Mum.)
S. 28(i) & 50C of the IT Act, 1961—Business Income—S. 50C deals with the transfer of the Capital asset being land or building or both and it provides for replacing the value adopted or assessed for the purpose of stamp duty more particularly under s. 48 in place of value or sale consideration shown by the assessee, therefore S. 50 is applicable only for purpose of determining the sale consideration for computation of capital gains and it cannot be applied for determining the income under other heads—Inderlok Hotels Pvt. Ltd. vs. ITO (2009) 122 TTJ 145 (ITAT-Mum)
S. 50C of IT Act, 1961—Capital gains—S. 50 of the Act cannot invoked where the transfer of property was through a document which was not registered with a registering authority. In the present case the eleven deeds based on which transfers were ultimately effected were undisputedly registered with registering authority and the value fixed by the registering authority for stamp duty was higher than the consideration mentioned therein and just because the assessee had entered into an agreement with a land developer would not mean that sale transaction was completed unless the assessee was able to bring on record all circumstances relating thereto which would make it possible to conclude that the transaction was completed as on that date itself. Hence, S. 50C is applicable in the present facts—Smt. Meera Somasekaran vs. ITO (2010) 4 ITR (Trib) 271 (ITAT-Chennai)
S. 48, 50C, 142A of IT Act, 1961—Capital gains—u/s 55A reference of the valuation cell can be made for the purpose of determination of the fair market value of the capital asset under certain circumstances. Therefore, reference u/s 55A cannot be made for the purpose of estimating the full value of consideration received or accrued. S. 50C(2) empowers the Assessing Officer to make a reference to the Valuation Officer in cases where the assessee claims before the Assessing Officer that the value adopted, assessed or reassessed or assessable by the stamp valuation authority u/s 50C(1) exceeds the fair market value of the property as on date of transfer. Hence, the provisions of S. 50C(2) of the Act are applicable at the request of the assessee when he claims that the stamp valuation is higher than the fair market value of the property. For the purpose of the computation of capital gains, stamp duty valuation has to be taken as full value of consideration. However, if the sale has been made at a lower value than the value prescribed by the stamp valuation authority for the purpose of stamp duty, the Assessing Officer has to adopt the valuation under the stamp as full value of consideration, in accordance with the provisions of S. 50C of the Act—Sumit Khurana vs. ACIT (2011) 11 ITR (Trib) 377 (ITAT-Del.)
S. 50C of IT Act, 1961—Capital gains—Since it is not disputed that the assessee had made a claim before the Assessing Officer that the value adopted or assessed by the Stamp Valuation Authority is higher than the fair market value and it was not a case whether the value adopted by the Stamp Valuation Authority had ever been disputed by the assessee in any appeal or revision or otherwise as referred to in S. 50C(2) of the Act and therefore, under such circumstances, it was incumbent upon the Assessing Officer to have referred the matter for valuation to a valuation Officer as provided in S. 50C(2) of the Act. However, since the Assessing Officer had failed to refer the matter to the valuation Officer u/s 50C(2) of the Act as required, the matter deserves to be restored to the file of the Assessing Officer for his fresh adjudication after referring the matter to the Valuation Officer u/s 50C(2) of the Act—Mrs. Trishla Jain vs. ITO (2011) 11 ITR (Trib) 579 (ITAT-Delhi)
S. 50C, 147 of IT Act, 1961—Reassessment—S. 50C of the Act is applicable in the case of the seller of the assets for charging capital gain on the basis of valuation made by the stamp duty authorities and it is not applicable in the case of the purchaser. However, the Finance Act, 2009, provides the provisions w.e.f. Oct. 1, 2009 to charge such differential value of the property as gift received by the purchaser of the property under the head of “Income from other sources” and this provision is not applicable to the assessment year under appeal, i.e. 2006-07—ITO vs. Venu Proteens Industries (2010) 4 ITR (Trib) 602 (ITAT-Ahd)
S. 50C, 69B of IT Act, 1961—Unexplained investment—The provisions of S. 50C are applicable only for the computation of capital gains in real estate transaction in respect of seller only and not for the purchaser. S. 50 creates a legal fiction for taxing capital gains in the hands of the seller and it cannot be extended for taxing the difference between the apparent consideration and the valuation done by the stamp valuation authorities as undisclosed investment u/s 69 of the Act. The Assessing Officer applied provisions of S. 50C for the computation of unexplained investment u/s 69B of the Act which was not permissible under the Act. Apart from the stamp duty valuation, there was nothing on record which suggested that the revenue had proved that the assessee had paid over and above, what he recorded as purchase consideration of the land in the sale deed. Therefore, by invoking the provisions of S. 69B of the Act, no addition of undisclosed investment could be made—ITO vs. Harley Street Pharmaceuticals Ltd. (2010) 6 ITR (Trib) 182 (ITAT-Ahd)
S. 45 & 50C of IT Act, 1961—Capital gains—Where registration does not take place by playing stamp duty, such case would be covered u/s 45(3) and not u/s 50C of the Act, 1961—Ram Mal Bhansali vs. ACIT (2012) 143 TTJ (UO) 65 (ITAT-Jd.)
S. 2(47), 45, 48, 50C of IT Act, 1961—Capital gains—In absence of any evidence on record to show that the assessee has received consideration over and above the amount recorded in the sale deed, no addition can be made by estimating and substituting the market value—Kaushik Sureshbhai Reshamwala vs. ITO (2011) 7 ITR (Trib) 146 (ITAT-Ahd.)
S. 45(1), 50C & 54E fo IT Act, 1961—Capital gains—S. 54F is an exemption provision and a complete code in itself. Since it is a complete code in itself, the computation of eligible exemption has to be worked out within its framework as far as possible. Being an exemption provision, beneficial interpretation has to be given. The “capital gains” and the “net consideration” have to be worked out within the framework of s. 54F, without imposing any fiction created by any other section. Thus the capital gains arising from the transfer of any long-term capital asset for the purpose of S. 54 F have to be worked out applyiing S. 48 without imposing S. 50C into it—Goul Mahadevappa vs. ITO (2011)TTJ 489 (ITAT-Bang)
S. 50C, r/w S. 48, of IT Act, 1961—Capital gains—In view of the provision of sub-s.(2) of S. 50C, fair market value as assessed by the DVO is lower than the value adopted by the Stamp Authorities for collecting stamp duty and, therefore, the value so adopted by DVO has to be adopted by the Assessing Officer for the purpose of computation of Long Term Capital Gain—ITO vs. Gita Roy (2012) 135 ITD 345 (ITAT-Kolkata)
S.45, 49, 50C of IT Act, 1961—Capital gains—Once the assessee acquired rights in the plot, which in itself is admittedly not an agriculture land, there is no question of considering it as agricultural land on the premise that it was allotted to the assessee against acquisition of agricultural land—Atul G. Puranik vs. ITO (2011) 11 ITR (Trib) 120 (ITAT-Mum.)
S. 50C of the IT Act, 1961—Capital gains—if an opportunity provided under sub-s.(2) and (3) of S. 50C to object to the value adopted by the stamp valuation authority is not availed by the assessee, the assessee has no locus standi to question the said value determined by the stamp authoirty—Ambattur Clothing Co. Ltd. vs. ACIT
S. 50C of the IT Act, 1961—Capital gains—Assessment of the capital gains tax can be adjusted as per outcome of writ petition preferred by the assessee and for that purpose the assessment cannot be kept pending.
S. 50C of the IT Act, 1961—Capital gains—S. 50C comes into play only when there is valuation at a higher value for stamp valuation purposes by the state authority then declared by assessee in the sale deed. When there is such difference noticed, valuation adopted by the stamp valuation authority has to be substituted with the sale consideration of such property mentioned in the sale deed.Since the stamp valuation authority had accepted the consideration declared by the assesse in sale deed, there is no question of once again referring the matter to the DVO —Punjab Poly Jute Corporation vs. ACIT (ITAT-ASR)
S. 45(3), 48, 50C & 55A of the IT Act, 1961—Capital gains—Where a sale transaction is registered by paying stamp duty then it is only S. 50C which can operate. In that situation S. 50C would override S. 45(3). S. 45(3) is a general provision and S. 50C is a special provision which override S. 45(3) if the sale deed is sought to be registered by paying stamp duty but where such registration does not take place by paying stamp duty that case would only be covered u/s 45(3) and therefore value recorded by the firm in its books would only be the fully value of consideration for the purposse of computing capital gains. Since there is no registration of transfer under registration Act and no stamp duty is paid, the provisions of S. 50C of the IT Act cannot be invoked—Carlton Hotel Pvt. Ltd. vs. ACIT (2009) 122 TTJ 515 (ITAT-Lucknow)
S. 50C of the IT Act, 1961—Capital gains—Only on account that S. 50C aplies only to capital assets and is not applicable to trading assets or stock-in-trade, cannot be held discriminatory. The capital assets and trading assets/stock-in-trade are treated differently under the Scheme of the Act and they cannot be compared at par with each other by considering them as a class of assets, therefore the discrimination on the ground of valid classification which answars the test of intelligible differentia does not attract worth of Article 14 of the constitution of India—K.R. Palanisamy vs. U.O.I. (2009
Income Tax Act, 1961, S. 45, 50C & 269UD—Capital Gains—The following question was involved. “(1) Whether the learned CIT(A) erred in upholding the order of the AO passed u/s 143(3) substituting the value adopted by the stamp valuation authorities as the full value of consideration received of Rs. 3,34,42,244 as against Rs. 2,34,00,000 recorded in the record of sale, (2) That the CIT(A) failed to appreciate that during the course of assessment, appellant had challenged the value adopted by the stamp duty authorities and the AO was informed of fair market value adopted u/s 50C where the Department had a right to pre-emptive purchase in lieu of the purchaser.” While allowing the appeal the ld. Tribunal held that “We find that actually the AO considered the valuation as made by the registered valuer of the asset (land) transferred, as on 1st April, 1981 to be exaggerated and that is why he referred the valuation to the DVO, who actually made a lower valuation, which was again accepted by the AO and acted upon in the matter of computation of the capital gains on the transfer of the asset (land) under consideration. Hence, the provisions of S. 55A in the matter of making reference to DVO were not satisfied. The learned Departmental Representative has argued that the reference was made u/s 50C and not u/s 55A. His argument, however, cannot be accepted. A reference u/s 50C can be made only in respect of the valuation of the asset at the time of its transfer which has given rise to the occasion for levy of capital gains tax. Such reference cannot be made for the purpose of evaluating the asset as on 1st April, 1981. The stamp duty valuation authority is, in no way concerned with valuation of the property on such date. Hence, we are of the considered opinion that there is no provision in the IT Act, 1961, which can justify reference of the valuation as on 1st April, 1981 in the instant case, especially when a valuation report prepared by a registered valuer had already been filed by the assessee. Hence, ultimately, we hold the reference to the DVO as made by the AO on this matter to be illegal which cannot be taken into account in computing the capital gains on the transfer of the asset (land) under consideration. We, therefore, direct that as the assessee actually filed a valuation report duly prepared by a registered valuer, which could not be disputed by the AO in a proper manner, the valuation of the asset (land) as on 1st April, 1981, as done by the registered valuer, is alone required to be taken into consideration in computation of the capital gains on the transfer of the asset (land) under consideration.” Neville De Noranha Vs. ACIT 6 ITCD 160 (ITAT, Kolkata)
S. 50C of IT Act, 1961—Capital gains—Since the sale consideration shown by the assessee in respect of plots is less than the valuation done by the Stamp Valuation Authority and there is no claim by the assessee before the Assessing Officer that such valuation by the Stamp valuation Authority is less than the fair market value of the plots under transfer, the Assessing Officer has no option but to adopt the valuation made by the Stamp valuation Authority as full value of consideration in place of the sale consideration shown by the assessee and calculate chargeable gains accordingly—Mohd. Shoib vs. DCIT [2010] 1 ITR (Trib) 452 (ITAT-Lucknow)
S. 50C—Capital Gains—IT ACT, 1961—ITO vs. YASIN MOOSA GODIL [2012] 147 TTJ 94 (ITAT-AHMEDABAD)
S. 50C of Income-tax Act, 1961—Capital Gains—The assessee sold plots treating them as stock in trade and not as capital asset but AA applied deemed provisions of S. 50C of the Act. Commissioner (Appeal) & ITAT both decided the matter in favour of assessee. While rejecting the appeal of the Revenue the Allahabad High Court held that:—”The Commissioner of Income-tax (Appeals) and the Tribunal on analysis of the facts of the case have reached to the conclusion that S. 50C has no application as it was a case of transfer of plots which was stock in trade. An income earned from such transaction is liable to be taxed as income from business activity. Alternatively, the finding recorded by the Tribunal which is last fact finding court, in this regard is essentially a finding of fact or at the most is a mixed question of fact, but it is not a substantial question of law to warrant the interference u/s 260A of the Income Tax Act. The view taken by the Tribunal is on terra-firma. The inference drawn by the Tribunal is based on relevant consideration. The appeal is dismissed by holding that on the facts of the present case, the Tribunal has rightly held that the provision of S. 50C are not applicable with respect of sale of land as sale of land was not capital asset.” [2012] 22 ITCD 15 (ALL)
Reference:
As Per Section 50C, of the Income Tax Act, 1961-
Special provision for full value of consideration in certain cases.
50C(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.
(2) Without prejudice to the provisions of sub-section (1), where—
(a) the assessee claims before any Assessing Officer that the value adopted or assessed [or assessable] by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer;
(b) the value so adopted or assessed [or assessable] by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court,
the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act.
[Explanation 1].—for the purposes of this section, “Valuation Officer” shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).
[Explanation 2.—for the purposes of this section, the expression “assessable” means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty.]
(3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed [or assessable] by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed [or assessable] by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.