Capital gains: reference to valuation officer

Tax queries 1757 views 3 replies

Neha sharma

1257 Points Joined February 2012

When a property is sold below the Stamp Duty, Section 50C and newly inserted Section 56(2)(vii) are applicable..

Under Section 50C, reference can also be made to the Valuation Officer... Can reference be made to the Valuation Officer under Section 56(2)(vii) ??

Moreover, if reference has been made to Valuation Officer under Section 50C, would the same be applicable in case of Section 56(2)(vii) as well ??

A detailed legal answer would be appreciated..

Replies (3)

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

Your case is not clear

"When a property is sold below the Stamp Duty, Section 50C and newly inserted Section 56(2)(vii) are applicable"

Sec 56(2)(vii), in relation to immovable property, is applicable in cases where there is NO CONSIDERATION

If there is a sale (PROPERTY IS SOLD) then there has to be some consideration,lest there will be no sale. If there is consideration then sec 56(2)(vii) will not apply

sec 56(2)(vii) does not apply if there is no consideration(Earlier there was this provision in the law but that was deleted with retrospective effect from 1.10.09) The main reason was that the geniune assessee who opted for DDA flats, DLF flats simialr builders scheme were in unjust loss. They were charged to increase in stamp duty value ,from the date of agreement to date of possession, u/c IOS

CA Aman Gupta

Chartered Accountant

344 Points Joined January 2010

According to the hitherto provisions for the application of sec. 56(2)(vii)(b), the gift should be without consideration. Hence, it will not apply if the property is SOLD.

However, amendment has been made on the said section vide finance act 2013 w.e.f. 01-04-2014, including the cases where immovable property is received for a consideration which is less than stamp duty value of the property by more than 50,000/-.

In regards to your query related the applicability of valuation done by govt valuation cell in respect of Sec. 50C, it is pertinent to note the first proviso of Sec. 56(2), wherein it has been clearly mentioned that valuation done in accordance with 50C will be applicable in this section and rectification shall be done in accordance with the provisions laid down in Sec. 155(15).

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

Thanks for Value addition

Let me add 1 more thing that there are 2 proviso for applicability of (b) part of the provision,which relates to immovable property

Provided that where the date of the agreement fixing the
amount of consideration for the transfer of immovable
property and the date of registration are not the same, the
stamp duty value on the date of the agreement may be
taken for the purposes of this sub-clause:

(this is what I referred as Unjust, good thing they made it as proviso)

Provided further that the said proviso shall apply only in a
case where the amount of consideration referred to therein,
or a part thereof, has been paid by any mode other than
cash on or before the date of the agreement for the
transfer of such immovable property