Top Stories Sale Consideration as determined by Stamp Duty Authorities has to be adopted for purposes of Computation of Capital Gain: ITAT [Read Order] The ITAT bench observed as per section 50 C of Income Tax Act its always the Stamp Valuation to be considered and there is no warrant to replace such figure in view of such binding legal fiction By Amal Michael – On February 22, 2024 6:02 pm – 3 mins read A two member bench of Jaipur Income Tax Appellate Tribunal ( ITAT ) has held that the sale consideration as determined/adopted by the Stamp Duty Authorities, has to be adopted for the purposes of computation of capital gain.

Thus, the intention of the legislature is quite clear that after this amendment, it is always the Stamp Valuation to be considered and there is no warrant to replace such figure in view of such binding legal fiction. This appeal filed by the assessee is directed against order of the Revenue dated 09-09-2022, for the assessment year 2012-13 Revenue had alleged that the assessee, Geeta Devi Sharma had purchased residential plot pursuant to sale agreement dated 12.02.2012, in which the assessee agreed to pay Rs.  71,000/- to purchase a house property, against which Rs. 6 lacs were paid in cash as advance at the time of signing of agreement and rest of Rs. 28,71,000/- was assured to be paid by 15.03.2012.

When asked the assessee submitted vide letter dated `NIL` that the assessee paid Rs.12 lakhs through various cheques to purchase the property through conveyance deed registered on 22.03.2012 before the Sub Registrar-Jaipur VIII, Jaipur. However, dissatisfied with the reply of the assessee, the AO concluded that the assessee had actually purchased the property for Rs.34,71,000/- as per Agreement to Sale dated 12.02.2012 (PB 47-51) instead of Rs.12.00 Lacs declared and that she had also incurred expenses of Rs. 4500/- for stamp duty and Rs. 20,100/- for registration charges. Finally, he made addition of Rs.35,36,100/- on account of unexplained income.

Assessee contended the point that the Revenue has not supplied any material which forms the basis for forming the charge against the assessee. Assessee further argued that  the seller has executed the sale deed on 22.03.2012 on lesser amount, in as much as the Revenue has ignored the following factual and legal aspects of the entire matter Assessee contended that Revenue completely ignored that the actual sale consideration was only Rs.12 lakhs however, it was only to pressurize the assessee seller this higher amount has been mentioned but not otherwise Revenue contended that the assessee had agreed to pay Rs. 34,71,000/- for purchase of a property, out of which Rs. 6,00,000/- had been paid in cash as an advance and the balance Rs 28,71,000/- was assured to be paid by 15/03/2012. Revenue argued that it had sufficient grounds to form the belief that the appellant’s income had escaped assessment therefore notice was issued  under section 148 of the Income Tax Act The bench comprising Rathod Kamalesh Jayantbhai ( Accountant Member ) and Sandeep Gosain ( Judicial Member ) held that “the sale consideration as determined/adopted by the Stamp Duty Authorities, has to be adopted for the purposes of computation of capital gain.Thus, the intention of the legislature is quite clear that after this amendment, it is always the Stamp Valuation to be considered and there is no warrant to replace such figure in view of such binding legal fiction.

The subjected transaction between the seller and the assessee buyer firm, was in accordance with the prevailing DLC rates and the Stamp Duty Authority has duly accepted the declared consideration. Thus, Sec 50C of Income Tax Act  directly and strongly supports the case of the assessee.”  Assessee was represented by Mahendra Gargieya and Shri Devan Gargieya. Revenue was represented by Monisha Choudhary.