Quality Chemicals Industries Vs DCIT (ITAT Mumbai)
Section 50C Addition by CPC Despite Assessee’s Objection: Mumbai ITAT Gives Firm Another Chance
Summary: Can the CPC adopt the stamp duty value while processing a return when the assessee has specifically objected and claimed that an earlier agreement date is relevant under section 50C? The Mumbai Tribunal considered this question in Quality Chemicals Industries. It found that the assessee’s objection had not been properly considered, but also noted that the supporting documents had not been placed before the CIT(A). The matter was therefore restored to the CIT(A) for a fresh examination.
The difference of ₹43.18 lakh
The assessee, a partnership firm, filed its return for AY 2021–22 declaring total income of approximately ₹2.04 crore. In computing short-term capital gains on the sale of a building, it adopted a value of ₹65,82,588. The CPC found that the stamp duty value of the property was ₹1,09,01,034 and proposed to add the difference of ₹43,18,446 to the declared capital gains.
A communication proposing the adjustment was issued on 9 August 2022. The assessee responded on 26 August 2022, expressly disagreeing with it. Nevertheless, the CPC issued an intimation under section 143(1) on 2 November 2022, making the addition by adopting the higher stamp duty value.
