2024 (2) TMI 1562 - HC - Income Tax

LTCG - Invocation of Section 50C - transaction relating to an immovable property - assessee had purchased the subject property and took stamp duty paid in respect of that transaction into consideration - ITAT has found that the aforesaid provision has been wrongly invoked bearing in mind the fact that it would apply only to an assessee who has received consideration or to whom consideration may have been paid as a result of the transfer of a capital asset - HELD THAT - Section 50C of the Act on its plain language is clearly concerned with the vendor or the seller of the property in question. The said provision can have no application to a purchaser. No merit in the instant appeal.

Summary

The Delhi High Court, in dismissing the Department's appeal, upheld the Income Tax Appellate Tribunal's (ITAT) ruling that Section 50C of the Income Tax Act, 1961 was wrongly invoked against the respondent/assessee. The key legal reasoning emphasized that Section 50C applies exclusively to the vendor or seller of a capital asset, not the purchaser. Despite the Department's reliance on the higher stamp duty value (Rs.12,34,00,000) compared to the purchase price (Rs.7,84,00,000), the Court held that "Section 50C of the Act... can have no application to a purchaser." Thus, the appeal was dismissed for lack of merit.