Assessee sold the land vide registered agreement dated 27th May 2004, for consideration of Rs.2,62,08,000/- and on the said date the circle rate was Rs.13,000/- per sq meter. However, on the date of registration of sale-deed, i.e. 16th September 2004, the circle-rate enhanced to Rs.20,000/- per sq meter. It was thus prayed that the AO was not justified to enhance the sale consideration, on the basis of circle-rate prevailing on the date of execution of sale deed. The ld CIT(A) however rejected the said submission and held that u/s 50C of the Act, the circle-rate has to be adopted on the date of transfer of the property, which is the date of sale-deed.
Before us, the ld counsel for the assessee, submitted that the circle-rate as on the date of agreement to sale is to be taken instead of circle-rate on the date of sale. He relied on the decision of Vishakapatnam Bench in the following cases:-
iii) Molle Rami Reddy Vs. ITO, ITA No. 311/Vizag/2010, dated 10.12.2010
Section 50C provides that where consideration received or accruing as a result of the transfer by an assessee, of a capital asset being a land or building or both is less than the value adopted or assessed by stamp-value authority, the value so adopted by the stamp value authority shall be deemed to be full value of consideration u/s 48 of the Act. It is thus manifest that the value adopted by the stamp-valuation authority is deemed as the consideration for computation of capital gain. However, such valuation adopted by the stamp-valuation authority should be in respect of the transfer by the assessee, of the capital assets. Now, in the instant case, undisputedly on the execution of the sale-deed circle, rate was Rs.20,000/- per sq meter and therefore, the value adopted for the purpose of stamp-duty was Rs.4,03,20,000/- which was deemed as full value of consideration by the AO. The assessee on the other hand contends that circle-rate on the date of agreement registered with registrar of Ghaziabad was for Rs. 13,000/- per sq meter, which works out to be the actual sale-consideration of Rs.2,62,08,000/- and therefore the said figure should be adopted instead of Rs.4,03,20,000/-. In our opinion, on the peculiar set of facts we find that the agreement to sale was duly registered, whereby, the total consideration was agreed to between parties works out to Rs.2,62,08,000/- and was adopted as the consideration for the payment of stamp-duty i.e.@ 4% of Rs.2,62,08,000/- i.e. Rs.10,48,320/-. In view thereof, the aforesaid valuation is also the value adopted by the stamp valuation authority in respect of transfer of the capital asset by the assessee. However subsequent to the said agreement to sell, there was change in the circle rate from 16th June 2014, whereby the valuation was enhanced from Rs.13,000/- to Rs.20,000/- per sq meter. This enhancement was beyond the control of the assessee (seller). It is also not the case of the revenue, that the buyer has given more than the consideration that has been accepted by the parties where they executed the agreement to sale. Furthermore on facts of a case, the Hon’ble Apex court held that registration of the transfer in accordance with the agreement to sale cannot be termed as the “date of transfer” as envisaged by Section 50C of the Act (Sanjeev lal & Anr. Vs. CIT & Anr. (2014) 365 ITR 389(SC)).
ITAT has followed ratio of the decisions in the case of Kodura Satya Srinivas ITA No.556/559 dated 02.07.2010 and Mook Rani Reddy 311/Visaka) dated 10.12.2010. No contrary decision has been brought to our Notice.
Having regard to the above, factual and judicial position we delete the addition. As a result the ground is allowed.