HC : Rejects stamp-duty valuation u/s. 50C for computing capital-gains on assignment of development rights

Bombay HC upholds ITAT order, rules that capital gains arising to assessee during AY 2005-06 on assignment of development rights, in respect of the immovable property, to a builder is to be computed based on the amount actually received by assessee, rejects adoption of stamp duty valuation u/s. 50C; The assessee had entered into a MOU with the Builder providing them with development rights in respect of property for a consideration of Rs. 2.51 cr; Firstly, HC notes that there was a gap of nearly 3 years between the date of execution of the MOU and the execution of a formal development agreement and the stamp duty authority had assessed the value of the property on the date of the execution of development agreement; Next, HC notes that the stamp valuation was for a larger area whereas the assessee had assigned the development rights only with respect to a smaller area; In light of these two significant factors, HC notes that ITAT had not adopted the stamp duty valuation, remarks that, “we do not find that the Tribunal has committed any error.”:HC