My agreement to sell was in 2005 and the sale deed was registered in 2009, and I took a small part of the price by account payee cheque on the agreement date. Can I use the 2005 stamp value, and does the ten per cent tolerance band help me for an old year?
On the agreement-date point, yes. The Tribunal directed the Assessing Officer to compute the gain on the stamp (DLC) value as at the date of the agreement, 3 January 2005, and not the date of registration, because Rs.35,000 of the consideration had been received by account payee cheque at the time the agreement was executed and the bank statements were on record. On the tolerance band, the order gives you less than it appears to: paragraph 10 records that on the 2005 value the difference between the agreed consideration and the DLC value was 9.34 per cent, "which is less than the prescribed 10 %" band, but that sentence follows a recital of what the assessee's representative demonstrated, and the operative direction at paragraph 10.2 rests on the agreement-date proviso alone and says nothing about the band. Do not cite this order as authority that the ten per cent band reaches back to AY 2010-11.
Decided by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member) on 2023-12-04, reported as ITA No. 382/JP/2023; Assessment Year 2010-11 (ITAT Jaipur 'A' Bench). It bears on section 50C, section 54, section 147, section 144, section 148, section 48 of the Income Tax Act 1961, in Capital Gains, Capital Gains Exemptions and Reassessment & Reopening matters.
This entry carries the agreement-date proviso as its holding; the tolerance band is recorded only as the argument it was. The first and second provisos to section 50C(1) let the stamp value on the agreement date be taken where the agreement date and the registration date differ, but only if part of the consideration was received by account payee cheque, account payee bank draft or electronic clearing — that is, otherwise than in cash — on or before the agreement date. That condition is what these cases turn on, and here it was satisfied by a documented cheque receipt at the time of the agreement, with the bank statement on record. On the tolerance band, read the order carefully before relying on it. Paragraph 10 does contain a statement that a 9.34 per cent variation is within "the prescribed 10 %" band, and the assessee's representative did argue that the amendment is curative and so available for AY 2010-11 — but the Tribunal's operative direction at paragraph 10.2 grants relief on the agreement-date proviso alone, and the only authorities it says it takes support from, its own coordinate bench in ITA No. 35/JP/2019 and the Madras High Court in Vummudi Amarendran, are decisions on the first proviso, not the third. So this order is strong authority on the agreement-date condition and weak authority on the band. If your year is before AY 2019-20 you are asking for the band to be applied retrospectively, that is a contested position which Tribunal benches have taken both ways including on the parallel first proviso to section 43CA, and you should plead it on its own reasoning rather than on this order.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee, along with 26 other parties holding in aggregate a 40 per cent interest, entered into an agreement to sell on 3 January 2005 in respect of property at Khasra Nos. 10 and 11, Badodia, opposite Hotel Rajputana Sheraton, Station Road, Jaipur, and received Rs.35,000 by account payee cheque at the time the agreement was executed. The sale deed for the assessee's 6.771 per cent share was registered on 13 May 2009. The assessee filed no return for AY 2010-11. The Sub-Registrar determined the value of the transaction at Rs.2,28,27,608. Notice under section 148 was issued on 31 March 2017 and, there being no compliance, the assessment was completed under section 144 read with section 147 on 27 December 2018, adopting a full value of consideration of Rs.91,13,043 against an actual consideration of Rs.59,16,709 and allowing a cost of acquisition of Rs.5,90,496 based on the Assessing Officer's own estimate of the 1 April 1981 fair market value at Rs.225 per square metre. The CIT(A)/NFAC upheld the addition, recording that the assessee had shown no evidence that a claim for a reference to the Valuation Officer had been made before the Assessing Officer. Before the Tribunal the assessee relied on the agreement date, the cheque receipt evidenced by bank statements at pages 80 to 88 of the paper book, and a registered valuer's report of the 1 April 1981 value at Rs.5,01,390; he also claimed section 54 relief for an investment made in his wife's name.
The appeal of the assessee was allowed. On the agreement-date ground the Tribunal directed the Assessing Officer to calculate the DLC rate as on the date of the agreement, 3 January 2005, and to compute the capital gain on that basis, ground 3 being allowed (paragraph 10.2); that direction is the whole of the relief on this ground and makes no reference to the tolerance band. Earlier, in paragraph 10 and immediately after recording what the assessee's representative had demonstrated about the Rs.35,000 account payee cheque, the order states that on the 2005 agreement value the difference between the actual agreed value and the DLC value was 9.34 per cent, "which is less than the prescribed 10 % in the proviso inserted [Substituted for "five" by the Finance Act, 2020] w.e.f. 1-4-2021". The Tribunal did not hold that the tolerance band is available for AY 2010-11 and did not decide the retrospectivity of the third proviso. The ground on the failure to refer the matter to the Valuation Officer became academic (paragraph 11). On cost of acquisition the Tribunal held that the Assessing Officer cannot replace a fair market value supported by an approved valuer's report as on 1 April 1981 without disputing it before the Valuation Officer, and directed that the valuer's report be accepted (paragraph 13). Section 54 relief was allowed notwithstanding that the investment was in the wife's name, following the Rajasthan High Court in Mahadev Balai v ITO (paragraphs 16 and 17).
On the provisos the Tribunal proceeded from the statutory condition: where the date of the agreement fixing the consideration and the date of registration are not the same, the stamp value on the agreement date may be taken, subject to the further condition that consideration should have been received as on the date of the agreement, which it found satisfied by the Rs.35,000 account payee cheque evidenced by the bank statements and by the agreement itself at pages 38 to 49 of the paper book; it also noted that the certified copy of the DLC rate showed that the later revision of rates did not apply to the assessee's agreement date (paragraphs 10 and 10.1). It accepted the assessee's submission that the proviso, being curative in nature, must be applied to the year in question, taking support from its own coordinate bench in ITA No. 35/JP/2019 and from the Madras High Court in CIT v Vummudi Amarendran, and reasoned that the amendment was brought in to relieve an assessee where the stamp valuation has risen between the agreement to sell and the sale deed, 'as is the norm rather than exception' (paragraph 10.2). On cost of acquisition it applied the Allahabad High Court in PCIT v Vidhi Agarwal and the reasoning in Susamma Paulose that a registered valuer's report is a valid piece of evidence which the Assessing Officer can displace only on reliable material, and noted that the officer had adopted a residential rate for what he himself accepted was commercial property and had ignored the construction on it (paragraphs 12 and 13).
Thus, we directed the ld. AO to calculate the DLC rate as on the date of agreement i.e. 03.01.2005 and compute the necessary capital gain based on that date DLC rate. In terms of this observation the ground no. 3 raised by the assessee is allowed.
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Handle my notice → Ask a CA on WhatsAppOn the agreement-date point, yes. The Tribunal directed the Assessing Officer to compute the gain on the stamp (DLC) value as at the date of the agreement, 3 January 2005, and not the date of registration, because Rs.35,000 of the consideration had been received by account payee cheque at the time the agreement was executed and the bank statements were on record. On the tolerance band, the order gives you less than it appears to: paragraph 10 records that on the 2005 value the difference between the agreed consideration and the DLC value was 9.34 per cent, "which is less than the prescribed 10 %" band, but that sentence follows a recital of what the assessee's representative demonstrated, and the operative direction at paragraph 10.2 rests on the agreement-date proviso alone and says nothing about the band. Do not cite this order as authority that the ten per cent band reaches back to AY 2010-11. This was decided by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member) and bears on section 50C, section 54, section 147, section 144, section 148, section 48 of the Income Tax Act 1961. It is reported as ITA No. 382/JP/2023; Assessment Year 2010-11 (ITAT Jaipur 'A' Bench). This entry carries the agreement-date proviso as its holding; the tolerance band is recorded only as the argument it was. The first and second provisos to section 50C(1) let the stamp value on the agreement date be taken where the agreement date and the registration date differ, but only if part of the consideration was received by account payee cheque, account payee bank draft or electronic clearing — that is, otherwise than in cash — on or before the agreement date. That condition is what these cases turn on, and here it was satisfied by a documented cheque receipt at the time of the agreement, with the bank statement on record. On the tolerance band, read the order carefully before relying on it. Paragraph 10 does contain a statement that a 9.34 per cent variation is within "the prescribed 10 %" band, and the assessee's representative did argue that the amendment is curative and so available for AY 2010-11 — but the Tribunal's operative direction at paragraph 10.2 grants relief on the agreement-date proviso alone, and the only authorities it says it takes support from, its own coordinate bench in ITA No. 35/JP/2019 and the Madras High Court in Vummudi Amarendran, are decisions on the first proviso, not the third. So this order is strong authority on the agreement-date condition and weak authority on the band. If your year is before AY 2019-20 you are asking for the band to be applied retrospectively, that is a contested position which Tribunal benches have taken both ways including on the parallel first proviso to section 43CA, and you should plead it on its own reasoning rather than on this order. If it applies to you, the first step is this: Produce the agreement to sell, and with it the proof of payment on or before its date — an account payee cheque, bank draft or electronic clearing entry — with the bank statement. A cash receipt will not satisfy the proviso and will lose you the agreement-date value.
The assessee, along with 26 other parties holding in aggregate a 40 per cent interest, entered into an agreement to sell on 3 January 2005 in respect of property at Khasra Nos. 10 and 11, Badodia, opposite Hotel Rajputana Sheraton, Station Road, Jaipur, and received Rs.35,000 by account payee cheque at the time the agreement was executed. The sale deed for the assessee's 6.771 per cent share was registered on 13 May 2009. The assessee filed no return for AY 2010-11. The Sub-Registrar determined the value of the transaction at Rs.2,28,27,608. Notice under section 148 was issued on 31 March 2017 and, there being no compliance, the assessment was completed under section 144 read with section 147 on 27 December 2018, adopting a full value of consideration of Rs.91,13,043 against an actual consideration of Rs.59,16,709 and allowing a cost of acquisition of Rs.5,90,496 based on the Assessing Officer's own estimate of the 1 April 1981 fair market value at Rs.225 per square metre. The CIT(A)/NFAC upheld the addition, recording that the assessee had shown no evidence that a claim for a reference to the Valuation Officer had been made before the Assessing Officer. Before the Tribunal the assessee relied on the agreement date, the cheque receipt evidenced by bank statements at pages 80 to 88 of the paper book, and a registered valuer's report of the 1 April 1981 value at Rs.5,01,390; he also claimed section 54 relief for an investment made in his wife's name. The matter was decided on 2023-12-04 by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member). On those facts the ITAT held as follows. The appeal of the assessee was allowed. On the agreement-date ground the Tribunal directed the Assessing Officer to calculate the DLC rate as on the date of the agreement, 3 January 2005, and to compute the capital gain on that basis, ground 3 being allowed (paragraph 10.2); that direction is the whole of the relief on this ground and makes no reference to the tolerance band. Earlier, in paragraph 10 and immediately after recording what the assessee's representative had demonstrated about the Rs.35,000 account payee cheque, the order states that on the 2005 agreement value the difference between the actual agreed value and the DLC value was 9.34 per cent, "which is less than the prescribed 10 % in the proviso inserted [Substituted for "five" by the Finance Act, 2020] w.e.f. 1-4-2021". The Tribunal did not hold that the tolerance band is available for AY 2010-11 and did not decide the retrospectivity of the third proviso. The ground on the failure to refer the matter to the Valuation Officer became academic (paragraph 11). On cost of acquisition the Tribunal held that the Assessing Officer cannot replace a fair market value supported by an approved valuer's report as on 1 April 1981 without disputing it before the Valuation Officer, and directed that the valuer's report be accepted (paragraph 13). Section 54 relief was allowed notwithstanding that the investment was in the wife's name, following the Rajasthan High Court in Mahadev Balai v ITO (paragraphs 16 and 17).
On the provisos the Tribunal proceeded from the statutory condition: where the date of the agreement fixing the consideration and the date of registration are not the same, the stamp value on the agreement date may be taken, subject to the further condition that consideration should have been received as on the date of the agreement, which it found satisfied by the Rs.35,000 account payee cheque evidenced by the bank statements and by the agreement itself at pages 38 to 49 of the paper book; it also noted that the certified copy of the DLC rate showed that the later revision of rates did not apply to the assessee's agreement date (paragraphs 10 and 10.1). It accepted the assessee's submission that the proviso, being curative in nature, must be applied to the year in question, taking support from its own coordinate bench in ITA No. 35/JP/2019 and from the Madras High Court in CIT v Vummudi Amarendran, and reasoned that the amendment was brought in to relieve an assessee where the stamp valuation has risen between the agreement to sell and the sale deed, 'as is the norm rather than exception' (paragraph 10.2). On cost of acquisition it applied the Allahabad High Court in PCIT v Vidhi Agarwal and the reasoning in Susamma Paulose that a registered valuer's report is a valid piece of evidence which the Assessing Officer can displace only on reliable material, and noted that the officer had adopted a residential rate for what he himself accepted was commercial property and had ignored the construction on it (paragraphs 12 and 13). In the words reproduced by the source cited on this page: "Thus, we directed the ld. AO to calculate the DLC rate as on the date of agreement i.e. 03.01.2005 and compute the necessary capital gain based on that date DLC rate. In terms of this observation the ground no. 3 raised by the assessee is allowed." The decision followed or applied CIT v. Vummudi Amarendran [120 taxmann.com 171] (Madras High Court) — followed on the agreement-date proviso; ITA No. 35/JP/2019 (ITAT Jaipur coordinate bench) — followed; PCIT v. Vidhi Agarwal (ITA No. 264 of 2015, Allahabad High Court) — relied on for the registered valuer's report; Mahadev Balai v. ITO (D.B. Income Tax Appeal No. 20/2016, Rajasthan High Court) — followed on investment in the spouse's name; Antony Parakal Kurian v. ACIT [2022] 138 taxmann.com 440 (Karnataka) — relied on by the Revenue, not applied.
It was decided by the ITAT on 2023-12-04 and is reported as ITA No. 382/JP/2023; Assessment Year 2010-11 (ITAT Jaipur 'A' Bench). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 50C, section 54, section 147, section 144, section 148, section 48, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal of the assessee was allowed. On the agreement-date ground the Tribunal directed the Assessing Officer to calculate the DLC rate as on the date of the agreement, 3 January 2005, and to compute the capital gain on that basis, ground 3 being allowed (paragraph 10.2); that direction is the whole of the relief on this ground and makes no reference to the tolerance band. Earlier, in paragraph 10 and immediately after recording what the assessee's representative had demonstrated about the Rs.35,000 account payee cheque, the order states that on the 2005 agreement value the difference between the actual agreed value and the DLC value was 9.34 per cent, "which is less than the prescribed 10 % in the proviso inserted [Substituted for "five" by the Finance Act, 2020] w.e.f. 1-4-2021". The Tribunal did not hold that the tolerance band is available for AY 2010-11 and did not decide the retrospectivity of the third proviso. The ground on the failure to refer the matter to the Valuation Officer became academic (paragraph 11). On cost of acquisition the Tribunal held that the Assessing Officer cannot replace a fair market value supported by an approved valuer's report as on 1 April 1981 without disputing it before the Valuation Officer, and directed that the valuer's report be accepted (paragraph 13). Section 54 relief was allowed notwithstanding that the investment was in the wife's name, following the Rajasthan High Court in Mahadev Balai v ITO (paragraphs 16 and 17). It arises in Capital Gains, Capital Gains Exemptions and Reassessment & Reopening matters, on section 50C, section 54, section 147, section 144, section 148, section 48 of the Income Tax Act 1961, and was decided by Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Get a certified copy of the stamp duty rate applicable on the agreement date, and of any subsequent revision, so the comparison is documented rather than asserted. Do the arithmetic on the agreement-date value first. Applying the earlier value may itself bring the difference inside the tolerance band, as it did here, which then disposes of the addition without any valuation dispute. State on the record which band you are claiming and for which year: five per cent from AY 2019-20 under the third proviso as inserted by the Finance Act 2018, ten per cent from AY 2021-22 after the Finance Act 2020. If your year is earlier, you are asking for retrospective application and must say so and argue it. Keep the section 50C(2) reference to the Valuation Officer as a separate and alternative ground; here it became academic once the agreement-date ground succeeded, but it should not be abandoned before then.
Validity check could not be completed. Validity check could not be completed; no appeal history or later treatment was searched for. On verification this order was found not to decide the retrospectivity of the tolerance band at all: the operative direction at paragraph 10.2 rests solely on the first and second provisos to section 50C(1) — the agreement date, and part payment otherwise than in cash on or before it — and the reference to a 9.34 per cent variation being within "the prescribed 10 %" is an observation in paragraph 10 following a recital of the assessee's representative's submissions. The library carries Maria Fernandes Cheryl v ITO (ITAT Mumbai, 15 January 2021) treating the third proviso as retrospective and Prithvi Developers v DCIT (24 June 2024) treating the corresponding first proviso to section 43CA as prospective; on a search of the Tribunal material the retrospective view is heavily preponderant, including Haware Engineers and Builders Pvt Ltd v ACIT (ITAT Mumbai, 2 April 2026) and Premchand Borasi v DCIT (ITAT Indore, 25 June 2026), and no decision holding the third proviso to section 50C prospective was located. No High Court decision on the point either way was located. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order is internally inconsistent on dates and figures and should be read with care. Paragraph 10 records the agreement as dated 03.01.2005, the cheque of Rs.35,000 as received 'on 11-01-2005 being the date of which the agreement was executed', and then at 10.1 says 'the agreement was duly executed on 31.01.2005'; paragraph 10.2 directs computation on the DLC rate as on 03.01.2005. The share sold is given as 6.771 per cent in paragraph 3 and 6.667 per cent in paragraph 10.2. Paragraph 11 uses the word 'educative' where 'academic' is plainly meant. The transcription of the order carried an elision marker where the Madras High Court decision in CIT v Vummudi Amarendran is quoted at length, so nothing across that gap is reproduced or relied on here. The order does not separately analyse whether the Finance Act 2018 third proviso or the Finance Act 2020 substitution is retrospective; it accepts the assessee's submission that the amendment is curative and follows its own coordinate bench in ITA No. 35/JP/2019 and the Madras High Court in Vummudi Amarendran (which concerns the first proviso, not the third). On verification, paragraphs 10.1 and 10.2 were reproduced in full. The operative direction is confined to the agreement-date proviso — "Thus, we directed the ld. AO to calculate the DLC rate as on the date of agreement i.e. 03.01.2005 and compute the necessary capital gain based on that date DLC rate. In terms of this observation the ground no. 3 raised by the assessee is allowed." — and contains no reference to the tolerance band, to ten per cent or to the third proviso. The 9.34 per cent sentence is in paragraph 10 and follows immediately after two sentences beginning "The ld. AR of the assessee demonstrated that Rs. 35,000/- has been received by an account payee cheque"; paragraph 10.1 attributes the curative argument expressly to the assessee's representative and the Bench says only that it takes "the support of the same view" of ITA No. 35/JP/2019 and of Vummudi Amarendran, both first-proviso authorities. This entry must not be cited as authority that the ten per cent band applies to AY 2010-11. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal of the assessee was allowed. On the agreement-date ground the Tribunal directed the Assessing Officer to calculate the DLC rate as on the date of the agreement, 3 January 2005, and to compute the capital gain on that basis, ground 3 being allowed (paragraph 10.2); that direction is the whole of the relief on this ground and makes no reference to the tolerance band. Earlier, in paragraph 10 and immediately after recording what the assessee's representative had demonstrated about the Rs.35,000 account payee cheque, the order states that on the 2005 agreement value the difference between the actual agreed value and the DLC value was 9.34 per cent, "which is less than the prescribed 10 % in the proviso inserted [Substituted for "five" by the Finance Act, 2020] w.e.f. 1-4-2021". The Tribunal did not hold that the tolerance band is available for AY 2010-11 and did not decide the retrospectivity of the third proviso. The ground on the failure to refer the matter to the Valuation Officer became academic (paragraph 11). On cost of acquisition the Tribunal held that the Assessing Officer cannot replace a fair market value supported by an approved valuer's report as on 1 April 1981 without disputing it before the Valuation Officer, and directed that the valuer's report be accepted (paragraph 13). Section 54 relief was allowed notwithstanding that the investment was in the wife's name, following the Rajasthan High Court in Mahadev Balai v ITO (paragraphs 16 and 17).
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