Hamida Munir Chagani Vs ITO (ITAT Mumbai)
Retrospective application of 10% tolerance limit u/s 50C- Also Stamp Duty paid by seller allowed: ITAT Mumbai
Mumbai ITAT has held that the enhanced tolerance limit of 10% under section 50C(1), inserted by Finance Act, 2020, is curative in nature & applicable retrospectively from 01.04.2003. Consequently, the addition made by AO towards difference between stamp duty valuation & actual sale consideration was deleted. Tribunal further allowed deduction of stamp duty & registration charges of Rs 86.36 lakh borne by Assessee in terms of the registered sale agreement.
Assessee, an individual engaged as a designing & marketing consultant, had sold a residential flat on 30.01.2020 for a declared consideration of Rs 13.63 crores. The stamp duty authority, however, valued the property at Rs 14,34,35,268/-, resulting in a difference of Rs 71,35,268/-. AO, invoking section 50C, adopted the stamp duty valuation as the full value of consideration & made an addition of the differential amount.
Further, Assessee had, as per the terms of the sale agreement, borne stamp duty of Rs 86,06,200/- & registration charges of Rs 30,000/-. AO disallowed these expenses on the reasoning that such charges are ordinarily borne by the purchaser & treating the arrangement as a device to reduce taxable capital gains. CIT(A) upheld AO’s order.
