PCIT Vs Bellandur Chikkagurappa Jayaramareddy (Karnataka High Court)
Date of Agreement, Not Registration, Governs Capital Gain Valuation – Karnataka HC Upholds ITAT Relief Under Section 50C; Proviso to Section 50C Retrospective in Nature – MOU Date to Be Adopted for Stamp Value If Part Payment Made; High Court Dismisses Revenue Appeal – Reaffirms ITAT View That “Text of Section 50C Is Clear as Gangetic Waters”
Revenue appealed against the ITAT Bangalore order dated 05.01.2022 (in ITA No.1322/Bang/2019 for AY 2014-15) which had granted relief to Bellandur Chikkagurappa Jayaramareddy, holding that for computing capital gains u/s 50C, the stamp duty value on the date of the MOU (08.04.2013),& not on the date of registration (24.02.2014), should be considered.
Revenue contended that the MOU was unregistered & hence invalid for determining “transfer”; accordingly, the guideline value on registration date should apply.
Assessee argued that the second proviso to Section 50C(1) allows the adoption of stamp value as on the date of the agreement if part of the consideration was received through banking channels before registration — which condition was fully satisfied.
High Court’s Observations
- The first & second provisos to Section 50C(1) were enacted to remove hardship & clarify that where agreement & registration dates differ, the value on the date of agreement may be adopted if consideration (wholly or partly) was received through banking mode before that date.
- The Court agreed with the ITAT that the MOU date must be taken as the relevant date, as part of the consideration had been paid via cheque before registration.
- The statute “leaves no discretion with the Revenue to adopt any date other than the date of agreement”; the text of Section 50C is “as clear as Gangetic waters.”
Held
