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2016 (4) TMI 77 - AT - Income TaxDeduction u/s 50C computation - whether the rate prevailing in the year 2005 when the assessee claimed to have entered into agreement for sale or the rate prevailing in the year 2007 when the assessee has finally executed the sale deed and registered are to be adopted as full value consideration u/s 50C - Held that:- Once the parties have agreed upon the sale consideration of the property in the year 2005, then it will be immaterial if the final sale deed was executed in the year 2007 when final payment was made to the assessee by the purchaser. It is not the case of the AO that the payment received by the assessee prior to sale deed was not part of the sale consideration. Therefore, when the assessee has received part sale consideration since 11/5/2005, then for the purpose of sec.50C of the Act, the Fair Market Value has to be applied in the year in which the parties have decided and agreed upon the sale consideration and not in the year when the sale deed was executed. Even if stamp duty valuation of the property at the time of registration of sale deed is adopted as full consideration, the same has to be subject to the verification whether the market value of the property at the time of sale consideration agreed upon by the parties is less than the valuation adopted by the stamp valuation authority then as per provisions of sec.50C(2) market value of the property is required to be taken after consideration of relevant facts including prevailing rate at the time of sale consideration agreed upon between the parties. In view of the above facts and circumstances of the case, we are of the considered opinion that the fair market value of the property has to be determined by the AO/DVO after considering all the relevant facts including the prevailing rate in the year 2005. Accordingly, the matter is set aside to the record of the AO for determining the fair market value of the property as per provisions of sec.50C(2) of the Act. - Decided in favour of assessee for statistical purposes.
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