ACIT Vs South India Research Institute Private Limited (ITAT Visakhapatnam)
Agreement Date Matters, Not Registration Date” – Visakhapatnam ITAT Holds s.50C Proviso Retrospective; Old MOU Saves Assessee from Crores in LTCG
Visakhapatnam ITAT in ACIT, Circle-1(1), Vijayawada vs. South India Research Institute Pvt. Ltd. (ITA No.243/Viz/2025, AY 2016-17, order dated 19.12.2025) dismissed Revenue’s appeal and upheld deletion of massive LTCG addition made u/s 50C.
Assessee had entered into an agreement/MOU as early as 25.05.2004, fixed consideration and received substantial advance through banking channels, though final registered sale deeds were executed much later in FY 2015-16 pursuant to litigation settlement and compromise. AO ignored the old MOU, applied SRO value as on date of registration, and computed LTCG of ₹35.41 crore by invoking s.50C.
CIT(A) held that provisos to s.50C (inserted by Finance Act, 2016) are curative & retrospective, and therefore stamp-duty value as on date of agreement / date of receipt of advance has to be adopted, not the inflated value on date of registration.
ITAT concurred with CIT(A), extensively relying on Dharamshibhai Sonani, Rahul G. Patel, Nageswara Rao Viswanadha, Bellandur Chikkagurappa Jayaramareddy & Easwar Committee report, and held that once consideration is fixed under an earlier agreement and part/full payment is received through banking channels, Section 50C cannot punish assessee for delay in registration or subsequent escalation in guideline value.
Revenue’s objections on unregistered MOU, variation in land extent, interim MOUs and compromise deeds were rejected. Tribunal ruled that for s.50C purposes, substance of transaction & timing of agreement prevail, and proviso must be read retrospectively to avoid undue hardship. Deletion of addition was thus affirmed.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
