Case Law Details
CIT Vs. Chandni Buchar (2010) 323 ITR 0510 (Pun.& Har.)
The Assessing Officer added the difference between purchase price disclosed in the sale deed and purchase price of the property adopted for the purpose of paying the stamp duty to the total income of the assessee as income from unexplained sources. The Commissioner of Income-tax (Appeals) deleted this addition by holding that section 50C is a deeming provision for the purpose of bringing to tax the difference as capital gain.
Further, he also held that in the absence of any legally acceptable evidence, valuation done for the purpose of section 50C would not represent actual consideration passed on to the seller. The Tribunal also held that valuation done by any State agency for the purpose of stamp duty would not ipso facto substitute the actual sale consideration as being passed on to the seller by the purchaser in the absence of any admissible evidence. The Assessing Officer is obliged to bring on record positive evidence indicating the fact that the assessee has paid anything more than the sum disclosed in the purchase deed. In this case, the assessee has discharged the burden of proving the sale consideration as projected in the sale deed by producing original bank statement.
The High Court, therefore, held that the view taken by the Tribunal while accepting the order of the Commissioner of Income-tax (Appeals) does not suffer from any legal infirmity.
See Mumbai High Court for the Contrary view in Bhatia Co-Hsg.Soc, Where actual consideration was 3.5 Cr against the stamp duty valuation 0f 15.5 cr. And the Court held it to constitutioally healthy.
2. If one goes to S. 50C, It is open for the AO to accept the apparent consideration. If the stamp duty valuation is more, the AO HAS TO SEND the property for valuation. AO is not free to ipso fact apply the Stamp duty valuation. Sadly , this point was not considered in BOTH THE CASES
50 C is a futile exercise and is creation of some insane babu
Taking the notional sale consideration adopted for the stamp duty purposes by State Govt Registering agency as additional income for tax other than the actual sale consideration as per the sale deed is stretching the taxation provisions unnecessarily.
valuation is for stamp duty is as per general survey of locality & not specific plot / Building. Hence the actual value may differ by lot of reasons eg in case of land – road touch, shape of plot, side (east / South), size of plot, etc