Delhi High Court Rejects Income Tax Department’s Appeal Against Thomson Press Over Alleged Transaction Of Property Below Circle Rate
The Delhi Excessive Court docket has dismissed an attraction most well-liked by the Revenue Tax Division in opposition to Thomson Press (India) over the sale of a property in Noida again in 2013, allegedly at a value a lot decrease than the prevailing circle charge.
A division bench of Justices Vibhu Bakhru and Tejas Karia famous that the registered settlement to promote and cost of stamp responsibility with respect to the property transaction had been already accomplished by the date when the circle charge of the world in query was enhanced.
“In view of the categorical discovering that the transaction was on the worth which is commensurate with the Circle charge on the materials time, the truth that the circle charge had been elevated subsequently would have little impact for the needs of Part 50C of the Act,” it noticed.
Part 50C of the Revenue Tax Act applies to the sale of capital property like land and buildings. It gives that the place the consideration acquired by an assessee on switch of a capital asset is lower than the worth adopted by the State for the aim of cost of stamp responsibility, the Assessee might be deemed to have acquired full worth as per the speed adopted by the State for the aim of calculating capital achieve.
Thus, within the info of the case, the Division alleged that M/s. Residing Media India Restricted (which owns and runs Thomson Press) bought the property in query to M/s. Maccons Infra Personal Restricted on the charge of ₹18,000/- per sq. meter, whereas the precise circle charge was ₹28,000/- per sq. meter. The latter quickly thereafter merged into Residing Media, elevating suspicion of foul play.
As such, the Division sought to make an addition of ₹20 crores to Residing Media’s taxable earnings by invoking Part 50C. It contended that the sale deed was executed between the events on 11.10.2013 whereas the circle charge of the world was enhanced previous to that, with impact from 01.08.2013.
The ITAT had rejected Income’s rivalry and had famous that a part of the sale consideration was paid even earlier than the date of the switch settlement, and the stamp responsibility was additionally paid on the date of the settlement to promote, that’s, on 30.05.2013. Thus, it had held that the sale consideration as agreed was on the circle charges, which had been relevant on the materials time.
Agreeing, the Excessive Court docket held that Income can’t be heard to contend that Part 50C of the Act is relevant retrospectively.
“In view of the categorical discovering that the transaction was on the worth which is commensurate with the Circle charge on the materials time, the truth that the circle charge had been elevated subsequently would have little impact for the needs of Part 50C of the Act,” it held.
Reliance was positioned on Principal Commissioner of Revenue Tax-6 v. Modipon Restricted, the place the Excessive Court docket had rejected Income’s rivalry that the circle charge, as on the date of the sale deed, is required to be thought of for the needs of Part 50C.
As such, the Division’s attraction was dismissed.
Look: Mr Puneet Rai, SSC, Mr Ashvini Kumar, Mr Rishabh Nangia, Mr Gibran, JSCs and Mr Nikhil Jain, Ms Srishti Sharma and Mr Pratham Aggarwal, Advocates for Appellant; Mr Salil Aggarwal, Sr Advocate with Mr Uma Shankar, Mr Madhur Aggarwal, Advocates for Respondent.
Case title: Pr. Commissioner Of Revenue Tax, Delhi-7 v. M/S Thomson Press (India) Ltd.
Case no.: ITA 192/2025
