No addition under Section 50C for a difference of up to 10% of stamp duty value on a retrospective basis
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Case Details: |
Mamatha Divakar Shetty vs. ITO |
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Appeal No.: |
ITA No. 1204/H/2017 |
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Order Pronounced by: |
ITAT Hyderabad |
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Date of Order: |
30-09-2021 |
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In Favour of: |
Assessee |
Brief Facts:
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The assessee along with 3 others had sold immovable property and the market value of the property for stamp duty was more than the sale consideration stated in the conveyance deed. It was found that the LTCG was calculated by adopting market value at Rs. 9,44,98,000/- and assessee being the 1/4th beneficiary at Rs. 2,09,62,515/- and after claiming deduction u/s 54F towards investment in a flat amount of Rs. 26,08,201/- was offered as a capital gain for the year under consideration. However, as per the records of Joint Sub-Registrar, Government of Telangana, the Market value of the above-cited property was Rs. 9,75,22,000/- and hence, the sale consideration was short considered to the extent of Rs. 30,24,000/- and the assessee being 1/4th beneficiary, LTCG was admitted short by Rs. 7,56,000/-. |
Tribunal’s Verdict:
On-going through the latest amendments made by the Finance Act, in section 50(C)(1), 3rd proviso, where the value adopted or assessed or assessable by the same valuation authority does not exceed 10% of the consideration received or accruing as a result of the transfer of consideration so received or accruing as a result of the transfer shall for the purpose of section 48 deemed to be the full value of the consideration. As per the above proviso, it is clear that if there is a variation of 10% of stamp duty value adopted by the SRO or the value shown by the assessee for computation of capital gains, in such as case, the value offered for tax by the assessee is to be adopted and section 50C does not apply to the case of the assessee. This amendment takes effect as retrospective in nature and this view is supported by the decisions of the coordinate benches of the ITAT, which are as under:
- Maria Fernandes Cheryl Vs. ITO [2021] 123 Taxmann.com 252 (Mumbai- Trib.)
- Amrapali Cinema vs. ACIT [2021] 127 com 376 (Delhi- Trib.)
The assessee in AY 2012-13 has taken the value of Rs. 9,44,98,000/- whereas the Pr. CIT adopted the value of Rs. 9,75,22,000/- which is less than 10% as per the amended provision.
The above case law also throws light on the revision powers of Pr. CIT u/s 263 which we have not discussed in the above article.
For complete judgment read: Mamatha Divakar Shetty vs. ITO
Disclaimer: The above article is based upon the ruling of the ITAT Hyderabad and is intended purely for informative purposes. Readers are advised to act diligently and under consultation with any professional before applying the information contained in this article.
