Now Reading: ITAT rules Tamil Nadu property seller not liable for higher stamp duty tax
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ITAT rules Tamil Nadu property seller not liable for higher stamp duty tax
ITAT rules Tamil Nadu property seller not liable for higher stamp duty tax
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has ruled in favour of a property seller who faced a tax demand of nearly Rs 99 lakh under Section 50C. Mr…
The Story in Brief
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) has ruled in favour of a property seller who faced a tax demand of nearly Rs 99 lakh under Section 50C. Mr Pragalanadane sold a plot in Chennai for Rs 94 lakh in March 2017, but the Tamil Nadu government's stamp duty guidance value for the property on the date of registration was Rs 1.93 crore.
The tax department had sought to tax the Rs 99 lakh difference as capital gains. However, ITAT accepted the taxpayer's argument that the sale consideration was fixed under an agreement to sell signed on July 11, 2013, and part payment of Rs 48.5 lakh was received via RTGS on the same day. The tribunal held that the stamp duty value as on the date of the agreement, not the registration, should apply. Another Ahmedabad ITAT ruling gave relief to a farmer who proved agricultural use of land to claim Section 54B exemption.
The Indian Opinion
This ruling should calm the nerves of many property sellers facing similar Section 50C notices. The tax department is right to check under-reporting of sale prices, but ignoring genuine advance agreements where part payment was made years before registration is bureaucratic overreach. If a seller can show a prior agreement and bank proof of substantial payment, the law should accept that. The real test: will the department now appeal this decision in a higher court, or will it accept the tribunal's sensible reading of the law? That will tell us if the taxman is serious about fairness or just revenue at any cost.
Sources (2): economictimes.indiatimes.com, economictimes.indiatimes.com (2)
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
