ITAT directs AO to consider actual value of property and not stamp duty valuation for capital gains calculation

 4,934 total views

ITAT directs AO to consider actual value of property and not stamp duty valuation for capital gains calculation

Sec 50C (2) provides that where the assessee claims before any AO that the value adopted or assessed or assessable by the stamp valuation authority exceeds the fair market value of the property as on the date of transfer, the AO may refer the valuation of the capital asset to a Valuation Officer.

Here is one case on the issue of capital gain computation on the basis of stamp duty valutation during assessment proceeding.

The same is as under :

Shri Goverdhan Prasad Singhal (2022 TAXSCAN (ITAT) 766)

Let us have a short overview of the case:


  1. The assessee has shown full value of consideration of the property received on transfer of capital asset, i.e., land and buildings at Rs.8,81,00,000/ whereas the Stamp Valuation Authority has fixed the value of the property at Rs.11,19,00,441/-.
  1. The rate adopted by the Stamp Duty Valuation Authorities for the said land of the appellant is very much on the higher side when compared to the rate of Rs.2,500/- of the land in Argo Food Park which is adjacent to that of the appellant’s land and shares a common boundary.
  1. Despite objection raised by the appellant on adopting the stamp duty value, Assessing Officer has not referred the matter to the Divisional Valuation Officer (DVO) as required u/s.50C (2).

ITAT Jaipur held as below: 

  1. The failure of the AO to follow the procedure as prescribed under section 50C (2) in particular, and therefore, the CIT(A) action in confirming such order is held unjustified and against law by sustaining stamp duty value of property Rs 11,19,40,441/- as deemed sale consideration u/s 50C against actual sale consideration and fair market value Rs 8,81,00,000/-.
  1. Accordingly, the AO is directed to adopt the value of sale consideration at Rs 8,81,00,000/- of the subject property for the purpose of computation of Long Term Capital Gains.

1 Comment

  1. June 17, 2022
    Mohammed Yunus Memon

    So useful and will give additional backup for better and lawfully submission before authorities.


Leave a Comment

Your email address will not be published.

the taxtalk

online portal for tax news, update, judgment, article, circular, income tax, gst, notification Simplifying the tax and tax laws is the main motto of the team tax talk, solving