50c read with 56

This query is : Resolved

P.Madhivadhanan (Querist)
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04 February 2024 An assessee who purchased a vacant site its stamp value exceed 110% than that actual price paid. Assessee wants to avoid section 56 deemed income due to the above transaction. what is the proceedure ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 February 2024 In order to safeguard the interest of the assesses in case of the genuine transactions, the income tax act provides a remedy to the seller, if in case, the assessee claims before the assessing officer that the stamp duty value adopted by the stamp valuation authority is higher than the fair market value of the asset (land or building or both), such assessing officer shall refer the valuation of such capital asset to the Valuation Officer. However, such reference to the valuation officer shall be made only if the stamp duty value adopted by the stamp valuation authority has not been disputed or challenged before any authority or any court. If, after reference made to the valuation officer for the valuation of a capital asset by the assessing officer, the value ascertained by such valuation authority exceeds the stamp duty value, then in such case, the stamp duty value adopted by the stamp valuation authority shall be considered as a deemed sale consideration for the purpose of computing capital gain tax in the hands of the seller. Thus it can be stated that the stamp duty value or the value ascertained by the Valuation Officer, whichever is lower, shall be deemed to be the sale consideration for the purpose of computing capital gain tax.

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