Archive · 11 Aug 2026
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.
ITAT Chennai granted a taxpayer relief from a ₹99.06 lakh tax addition after he sold a property for ₹94 lakh against a ₹1.93 crore stamp-duty value.
The tribunal held that relief under Section 50C of the Income Tax Act cannot be denied merely because the agreement to sell was unregistered.
Aroumougam Pragalanadane fixed the sale consideration at ₹94 lakh in an agreement dated 11 July 2013 and received ₹48.50 lakh via RTGS the same day.
The Assessing Officer had treated the ₹1.93 crore stamp value as deemed sale consideration, a view upheld by the Commissioner of Income Tax (Appeals).
In its 8 July 2026 order, the ITAT ruled that stamp value as on the date of the agreement should apply when the statutory payment condition is met.
- Who
- Aroumougam Pragalanadane, a taxpayer in Chennai, and the Income Tax Appellate Tribunal (ITAT), Chennai
- What
- The ITAT granted income tax relief by setting aside a ₹99.06 lakh addition, ruling that an unregistered agreement to sell could still qualify for relief under Section 50C
- When
- ITAT order dated 8 July 2026; the agreement to sell was dated 11 July 2013 and the sale deed was registered on 7 March 2017
- Where
- Chennai, India
- Why
- The tribunal found the sale price was fixed and paid through banking channels on the agreement date, so the higher stamp value at registration could not be treated as deemed sale consideration
Taxpayer's Position
Income Tax Department's Position
Unregistered agreement under Section 50C
Taxpayer's Position
An unregistered agreement to sell should still qualify for the Section 50C proviso because the consideration was fixed and largely paid on the agreement date through banking channels.
Income Tax Department's Position
Relief under Section 50C could not be granted because the agreement to sell was not registered; the Assessing Officer and the Commissioner of Income Tax (Appeals) upheld the addition.
Deemed sale consideration
Taxpayer's Position
The ₹1.93 crore stamp-duty value prevailing at registration should not be used since the consideration was fixed at ₹94 lakh in 2013.
Income Tax Department's Position
The stamp-duty value of ₹1.93 crore should be treated as the deemed sale consideration, resulting in an addition of ₹99.06 lakh.
- Taxpayer
- Aroumougam Pragalanadane
- Sale consideration
- ₹94 lakh
- Stamp-duty value at registration
- ₹1.93 crore
- Tax addition set aside
- ₹99.06 lakh
- Agreement to sell date
- 11 July 2013
- Amount received on agreement date (RTGS)
- ₹48.50 lakh
- Balance paid via banking channels
- ₹45 lakh
- Sale deed registration date
- 7 March 2017