Case Law Details
On applicability of Section 50C of the Act in absence of registered document- Capital gain has to be computed on the basis of sale consideration received or accruing to the taxpayer. Even if the document was not registered, the capital gain has to be computed on the basis of the sale consideration shown and received by the taxpayer unless there was material to show that the sale consideration was understated. In this case, the document was not registered and no stamp duty had been paid. Therefore, stamp duty value cannot be adopted for the purpose of computation of capital gain and the value shown in the agreement has to be adopted as there is no material to show that the taxpayer had understated the sale consideration.
It is pertinent to note that an amendment has been made in Section 50C of the Act with effect from 1 October 2009 to bring unregistered document also under the purview of Section 50C of the Act. In view of this amendment, this Ruling would not hold good for the sale transactions entered into post 1 October 2009. However, it would still hold good for the sale transactions that are entered into prior to 1 October 2009
On applicability of Section 50C of the Act to tenancy rights –Only for the limited purpose of computation of capital gain in respect of sale of land and building, stamp duty value has to be substituted for sale consideration in view of specific provisions of Section 50C of the Act.Therefore, provisions of section 50C of the Act cannot be applied in case of transfer of tenancy rights in respect of land or building or both.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No. 6320/M/2010
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