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Recently, the Mumbai Bench of the Income-tax Appellate Tribunal in the case of Neelkamal Realtors and Erectors India Pvt. Ltd. (the taxpayer) held that stamp duty valuation provisions under Section 50C of the Income-tax Act, 1961 (the Act) are not applicable to sale of flats held as stock-in-trade.
Further, the provisions of Section 43CA of the Act providing stamp duty valuation for land or building or both, held as stock-in-trade is applicable only from Assessment Year (AY) 2014-15 and not retrospectively. It is only from AY 2014-15, i.e. after the insertion of Section 43CA, that the Assessing Officers (AO) have been discharged from the burden of proving that sale price of land or building or both held as stock-in-trade is understated. For the period prior to AY 2014-15, burden is squarely on AO to prove that sale price of land or building or both held as stock-in-trade ought to be higher than the sale price declared by the taxpayer.