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Chennai Taxpayer Wins ITAT Case on Property Sale
10 Aug
Summary
- Taxpayer sold property for Rs 94 lakh, ignoring Rs 1.93 crore stamp duty value.
- Unregistered sale agreement didn't prevent taxpayer from winning ITAT case.
- ITAT Chennai ruled stamp duty value on agreement date is applicable.
The Income Tax Appellate Tribunal (ITAT) Chennai recently ruled in favor of a Chennai taxpayer, Pragalanadane, regarding a property sale that occurred in AY 2017-18. The taxpayer sold a property for Rs 94 lakh, though its stamp duty valuation was Rs 1.93 crore. The Income Tax Department issued a notice under Section 50C to tax the differential amount of Rs 99 lakh.
Initially, the Assessing Officer and CIT (A) upheld the tax department's action, citing the lack of registration for the 'agreement to sell'. However, the ITAT Chennai's B Bench, hearing the case on June 2, 2026, and delivering a judgment on July 8, 2026, overturned this decision.
The tribunal noted that an agreement to sell does not require mandatory registration to claim benefits under Section 50C. They found that the sale consideration was fixed on an earlier agreement date, July 11, 2013, with substantial payments received through RTGS. The ITAT emphasized that Section 50C's provisos protect genuine transactions where consideration is fixed early and payments are made via banking channels, even if registration occurs later when stamp duty values have increased.
