Rasmeet Singh Malhotra Vs DCIT (ITAT Indore)
The appeal before the Income Tax Appellate Tribunal, Indore Bench, arose from the order of the Commissioner of Income Tax (Appeals)-3, Bhopal, relating to Assessment Year 2017-18. The dispute concerned computation of capital gains under Section 50C of the Income-tax Act, 1961.
The assessee, being a joint owner with a 50% share in an immovable property, sold the property during the relevant year. The actual sale consideration received for the entire property was Rs. 84,00,000, making the assessee’s share Rs. 42,00,000. However, the stamp valuation authority valued the property at Rs. 85,00,000, making the assessee’s share Rs. 42,50,000.
While filing the return, the assessee computed capital gains by taking the actual consideration of Rs. 42,00,000. The Assessing Officer invoked Section 50C and substituted the stamp duty valuation of Rs. 42,50,000 as the full value of consideration. The CIT(A) confirmed this action.
Before the Tribunal, the assessee argued that the benefit of the third proviso to Section 50C(1), inserted by the Finance Act, 2018 with effect from 01.04.2019, should be available. The proviso states that where the stamp duty value does not exceed 105% of the actual sale consideration, the actual consideration shall be deemed to be the full value of consideration for the purpose of Section 48.
