Sec 50C

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CA Manish Khanna (Querist)
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17 July 2011 Land is located in Green Belt. Green Belt is an area as per law where no building can be constructed.
(A) This land is sold at rates below circle rates.
Decide capital gains vis a vis Sec 50C.
(B) The agreement to sell the same land was entered at a price above sale rate but by the time sale deed was registered the circle rates rose higher than the contracted rates. The sale was concluded at lower rates. Will Sec 50C be apllicable?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 July 2011 Land is located in Green Belt. Green Belt is an area as per law where no building can be constructed.

(A) This land is sold at rates below circle rates. Decide capital gains vis a vis Sec 50C.

Reply-

As construction is not permitted, the prescribed circle rates also must be according to the situation and use of the land.
.

However, possibilities of a common valuation for the whole zone/area can not be denied.
.

In the opinion of the assessee, if the circle rates are not favorable to him, he may show actual sales consideration for the purpose of calculation of capital gains.

.

On being called by the AO he may explain the reasons in writing. He may produce private valuer's V. Report also.

.

The AO if not satisfies , then request can be made to refer the valuation part to the department's valuation officer. If the valuation as shown by the
DVO is lesser then the circle rate, capital gains will be calculated accordingly.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 July 2011 B) The agreement to sell the same land was entered at a price above sale rate but by the time sale deed was registered the circle rates rose higher than the contracted rates. The sale was concluded at lower rates. Will Sec 50C be apllicable?

Reply-

The point of time described for the sales consideration by Section 50C is as -"as a result of transfer" which clearly indicates that the section applies on the basis of valuation as taken for transfer by the stamp officer.

In my view, 50C will apply.

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