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2020 (6) TMI 74 - AT - Income TaxComputation of Capital gain - Section 50C applicability - agreement for sale of the property before execution of the sale deed and registration - assessee adopted the guideline value as on 04.08.2012 for computing the capital gain - adoption of guideline value on the date of entering into sale agreement OR based on the execution of sale deed - HELD THAT:- It is well settled principles of law that guideline value is only to guide the Sub-Registrar to find out the correct market value for the purpose of collecting stamp duty. Market value is not a constant figure. It may vary depending upon the various factors. Therefore, the guideline value may not always represent the market value of the property. Because of deeming provision, Section 50C of the Act, the guideline value has to be adopted in case the market value or the agreed price between the parties was less than the guideline value fixed by the Government. When there was a difference between the dates of agreement for sale and the actual execution of registrated sale deed another question may arise, whether the guideline value as on the date of agreement has to be adopted or on the date of execution of sale deed has to be adopted. Once the assessee entered into an agreement of sale of the property, the purchaser has the right to enforce the agreement specifically through a competent civil court. Therefore, the assessee being the vendor cannot claim any more money over and above the agreed sale price merely because there was an obvious revision in the guideline value. Keeping this situation in mind, the Parliament in their wisdom incorporated first proviso to Section 50C of the Act by Finance Act, 2016 with effect from 01.04.2017. This is to clarify the existing position of law and to avoid further litigation. Therefore, this Tribunal is of the considered opinion that first proviso to Section 50C of the Act, is applicable retrospectively. It does not create any new right between the parties. It simply clarifies the existing position of law. CIT(A) after referring to first proviso to Section 50C of the Act, directed the Assessing Officer to adopt the guideline value as on 04.08.2012, being the date of agreement and there after compute the assessee’s capital gain. Therefore the Revenue cannot have any grievance in the decision of the CIT(A). - Decided in favour of assessee.
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