Friday, June 20, 2014

Even genuine transactions go through rigours of sec. 50C; provision applicable if stamp value exceeds actual price

Stamp duty value shall be deemed to be full value of consideration where consideration stated by assessee is less than stamp duty value and section 50C would operate, whatever may be the problems faced by an assessee.


a)The assessee sold her property below the market value adopted by the Registration Authorities . By invoking provisions of Section 50C, the Assessing Officer (‘AO’) had brought the difference (i.e., difference between actual price of property and value adopted by registration authorities) to tax.

b)The assessee substantiated her claim on the ground that the property was sold for lesser price on account of pending litigations with the tenants. On appeal, the CIT(A) deleted addition made by AO. The aggrieved-revenue filed the instant appeal.

The Tribunal held in favour of revenue as under:

1)Section 50C states that the stamp duty value shall be deemed to be the full value of the consideration where the consideration stated by the assessee is less than the stamp duty value. Being a deeming provision of Section 50C, it has to be strictly applied without widening its scope.

2)If the assessee had not been satisfied with the value adopted for the stamp duty purposes, the assessee could request the Assessing Officer to refer the matter to the DVO for valuation but assessee had not done so.

3)The misfortunes happened to the assessee or the difficulties faced by the assessee or the matter of distress sale, etc. could not be a ground to modify the valuation. If such extraneous factors were relied upon, the deeming provision of law stated in section 50C would be contravened.

4)Being so, the Assessing Officer had to complete the assessment as per the provisions of section 50C and whatever problem might have been faced by assessee, in reality; those reasons could not be permitted to go beyond the scope of section 50C- ITO V. SMT. CHITTI PARVATHA VARDHANAMMA [2014] 45 327 (Hyderabad - Trib.)