ITAT Chennai grants Section 50C relief despite unregistered sale pact

A man in Chennai agreed to sell a property for ₹94 lakh back in 2013.

The government sets an official value for properties, used for stamp duty, and that value rose to ₹1.93 crore by the time the sale was officially registered.

Because the official value was much higher than the agreed price, the tax office wanted him to pay tax as if he had sold the property for the higher value.

The tax office added about ₹99 lakh to his taxable income.

The man argued that the price was fixed in 2013 and that he had already received most of the money through bank transfers.

The tax office said he could not use the old price because his agreement paper was never registered.

A special tax court called the Income Tax Appellate Tribunal, or ITAT, in Chennai looked at the case.

The court decided that the man could use the earlier agreed price because the deal was made and paid for through banking channels before registration.

It also said that just because the agreement was not registered, the taxpayer should not lose his right to relief.