Vijay Krishnaji Sawant Vs ITO (ITAT Mumbai)
The appeal before the Tribunal arose from an order passed by the National Faceless Appeal Centre for Assessment Year 2012–13. The case involved two primary issues: determination of the correct sale consideration under Section 50C of the Income-tax Act, 1961, and the assessee’s eligibility to claim deduction under Section 54.
The assessee, an individual, had been allotted a residential flat in February 2004 and was given possession in the same year. Subsequently, in March 2005, the assessee entered into a Memorandum of Understanding (MOU) to sell the property for ₹1.60 crore. The entire sale consideration was received between December 2005 and June 2006 through banking channels. However, due to procedural requirements, including obtaining a No Objection Certificate from the housing society and permission from the Collector, the transfer deed could only be registered in November 2011.
In the return of income, the assessee computed long-term capital gains based on the actual consideration received and claimed deduction under Section 54 for investment in a new residential property purchased in April 2012. During assessment, the Assessing Officer invoked Section 50C and adopted the stamp duty value of ₹2.37 crore as on the date of registration as the deemed sale consideration. The Assessing Officer also denied deduction under Section 54 on the grounds that the assessee had received the sale proceeds earlier and had not invested within the prescribed time limits. Further, the capital gain was treated as short-term capital gain.
