ITAT: Unregistered sale agreement still qualifies for Section 50C relief

The Assessing Officer treated ₹1.93 crore as the deemed sale consideration and made an addition of ₹99.06 lakh – the gap between the stamp value and the ₹94 lakh in the sale deed. The taxpayer argued that the sale price had been fixed under the 11 July 2013 agreement and that most of the consideration moved through RTGS before registration. The Assessing Officer rejected the argument because the agreement was not registered. The Commissioner of Income Tax (Appeals) upheld the addition.

The Chennai ITAT took a different view. In its 8 July 2026 order, the tribunal said the provisos to Section 50C allow the stamp-duty value as on the date of the agreement to be considered when the date of the agreement fixing the consideration differs from the date of registration – provided the statutory payment condition is met. The tribunal found that the sale price was fixed on 11 July 2013 and that ₹48.5 lakh had already been received through RTGS that day. The remaining ₹45 lakh also moved through RTGS before registration.

The tribunal rejected the argument that an unregistered agreement cannot qualify for the Section 50C proviso. Once the agreement, the agreed consideration and the banking-channel payments were established, the benefit cannot be denied merely because the agreement itself was unregistered, the tribunal said.

The ruling is significant for property sellers whose transactions span several years. A surge in guideline values between the agreement date and the registration date can create a tax liability on income the seller never actually received. The case underscores the importance of preserving the agreement to sell, payment records and other documentary evidence when a property transaction spans several years.

For taxpayers, the takeaway is practical: keep the agreement to sell, bank receipts and any evidence that the consideration was fixed and partly paid well before registration. An unregistered agreement is not a dealbreaker, provided the payments moved through banking channels.