Valuation of the stamp authority cannot be adopted for capital gain if there is a long gap in execution of the MOU and formal development agreement : HC

The valuation of the stamp authority cannot be adopted for calculating capital gain as per Income Tax when there is a long gap between the date of execution of the Memorandum of Understanding and formal development agreement

Bombay High Court in matter of The Pr. Commissioner of Income Tax 19 v/s. The Executor of Estate of Late Smt. Manjula A. Shah

The Extract of Judgement is given below

5. From the record, it can thus be seen that there were two significant factors why the CIT(A) and the Tribunal did not adopt the valuation of the stamp authority for the purpose of collecting capital gain tax in the hands of the assessee. Firstly, there was a gap of nearly 3 years between the date of execution of the MOU and the execution of a formal development agreement. Obviously, the valuation made by the stamp authority was as on the date of the execution of the development agreement. Secondly and more importantly, the stamp valuation of Rs.4.63 crores was for a larger area of 7644 sq. meters where the assessee had assigned the development rights only with respect to 3872 sq. meters.

6. Under the circumstances, we do not find that the Tribunal has
committed any error. No question of law arises.

7. The tax appeal is dismissed.