In a ruling involving the determination of the Sale Deed Value (SDV), the ITAT clarified that the date of allotment should be treated as the effective date of agreement in property transactions, rather than the date of registration.
ITAT Clarifies Property Agreement Effective Dates
The Income Tax Appellate Tribunal (ITAT) ruled in the case of Sulochana Saijan Modi v. ITO (2023) that in property transactions, the date of allotment should be considered as the effective date of agreement for determining the Sale Deed Value (SDV) under Section 56(2)(x) of the Income Tax Act. This determination arises from a situation where the Assessing Officer (AO) relied on the date of registration for SDV calculations.
The tribunal held that the allotment letter serves as a binding agreement in potential property dealings, stating,
“The date of registration is not a definitive marker for establishing the initiation of turnover for tax purposes.”This assertions align with judicial precedents affirming that the operational use of allotment dates distinguishes different stages of property transactions.
This ruling has broader implications for tax practitioners involved in property taxation, as it clarifies the relevant date for tax assessments in property-related transactions. Lawyers and tax advisors should ensure that their clients understand the importance of holding accurate records of allotment dates for fiscal responsibilities.
Citations
- Sulochana Saijan Modi v. ITO (2023) Volume Reporter Page
