Where immovable property held as a Capital asset is transferred, provisions of Sec. 50C come into play. For more on that, refer to my previous article.

Budget 2013 has proposed the introduction of a new Section 43CA which is paralllel to Section 50C. The only difference lies in the fact that 43CA applies to immovable property (being land or building or both) NOT held as Capital asset. 43CA states that where the consideration for the transfer of an asset (other than capital asset), being land or building or both, is less than the stamp duty value, the stamp duty value shall be deemed to be the full value of the consideration for the purposes of computing income under the head “Profits and gains of business of profession”.

This section has been introduced to cover the apparent source of investment of unaccounted money when the market price of the flats or building constructed and sold by builders and developers which are their business activity, and their ‘stock-in-trade’, are lower than the stamp duty value.

It is also proposed to provide that where the date of an agreement fixing the value of consideration for the transfer of the asset and the date of registration of the transfer of the asset are not same, the stamp duty value may be taken as on the date of the agreement for transfer and not as on the date of registration for such transfer. However, this exception shall apply only in those cases where amount of consideration or a part thereof for the transfer has been received by any mode other than cash on or before the date of the agreement.

All the provisions, particularly Sec. 50C(2) and Sec. 50C(3) have been made applicable through provisions of Sec. 43CA to transfer of stock in trade as well. The judgments in respect of procedure in applying provisions of Sec. 50C are also applicable under Section 43CA.

These amendments will take effect from 1st April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years.

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