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Section 43ca applicability

Pawan Mittal (CA Final) (702 Points)

01 July 2014

Dear Experts,

Mr. A entered into an agreement with Mr. B (Builder) to purchase a building on 1.4.2012 for Rs. 15 lacs. The stamp duty value on 1.4.2012 was Rs. 15 lacs. Since the agreement Mr. A has paid 15 installment of Rs. 1 lac each to Mr. B as consideration.

Now on 01.07.2013 the stamp duty value is Rs. 20 lacs. Now what will be the income of Mr. B under the head PGBP when the sale deed is executed on 01.07.2013. But according to Section 43CA when the date of agreement and date of sale deed are different than date of agreement can be taken as sales consideration.

As Section 43CA is applicable for A.Y. 2014-15 i.e. from 1.04.2013, whether in the above mentioned case Mr. B can claim relief u/s 43CA and take Rs. 15 lacs as sale consideration?

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8 Replies

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 01 July 2014

yes, Mr B(builder) can take stamp duty value as on 1.7.2013-Rs. 15lacs as sale consideration for the pourpose of sec 43CA because a part of consideration has been received on or before the date of agrrement.......but pls check that such part consideration to be received by any mode other than cash(if recived in cash then the said benefit cannot be taken)

1 Like

Pawan Mittal (CA Final) (702 Points)
Replied 01 July 2014

Thanx Saurabh. But I want to know the applicability of Section 43CA. Section 43CA is applicable from 1.4.2013 but the agreement in the above case was entered on 1.4.2012.

Pavan Kumar (b) (60 Points)
Replied 01 July 2014

sec 43ca is applicable to all sales made after 1-4-2013, date of aggrement can be prior to that date

CA Pooja Sharma (Chartered Accountant) (192 Points)
Replied 01 July 2014

Agree with Saurabh & Pawan, Accorrding to Section 43CA of IT Act, where the date of an agreement fixing the value of consideration for the transfer of the asset and the date of registration of the transfer of the asset are not same, the stamp duty value may be taken as on the date of the agreement for transfer and not as on the date of registration for such transfer.

However, this exception shall apply only in those cases where amount of consideration or a part thereof for the transfer has been received by any mode other than cash on or before the date of the agreement.

Further Section 43CA is applicabe since sale deed is executed on 01-07-13 (i.e. after 01-04-13) as in case of sale of immovable property sales take place on the date of execution of sale deed not on the date of agreement to sell.

1 Like

Prateek Tiwari (Senior Accountant / Account & Audit Assitant) (149 Points)
Replied 12 September 2014

sir what will be the applicability if amount has been received by cash & cheque before date of Agreement

V.R.MANIKANDAN (ca firm) (50 Points)
Replied 11 October 2014

Date of Agreement is not consider to take 43 CA,only the date of agreement,

Kamlesh (Student CA Final ) (21 Points)
Replied 14 March 2016

Ashish goel (Student CA Final ) (46 Points)
Replied 08 October 2016

Hi All,

If Suppose Mr A sold his property on 1/1/2011, receive the amuount in cash , registry of which has been made in year 2016, as all the amount was received in cash only,

do this transaction will also attract sec43ca .

or not.