9911796707
TMI Blog2012 (4) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... 05-06, the appellant had booked a flat No.701 with M/s. Patel Brothers Construction Corporation, Patel Apartment, Byculla Mumbai, which was under-construction. The total agreed purchase price was Rs. 15,99,000/- out of which Rs. 50,000/- was payable at the time of booking and the balance amount was payable in installments in such a manner that the entire amount was paid before taking possession of the flat. In addition to the purchase consideration, the appellant had to pay Rs. 13,000/- for legal charges, taxes, electric water deposit, formation of society charges etc. Out of the agreed aggregate consideration of Rs. 16,12,000/- the appellant had paid an amount of Rs. 50,000/- at the time of booking on 25-6-2004 by cash and the balance amount was paid by the appellant in various installments from time to time. An amount of Rs. 1,00,000/- was kept outstanding by the appellant since the builder i.e. M/s. Patel Construction Corporation had failed to give the possession of the flat in time to the appellant and also failed to allot the promised parking place. As the entire amount was not paid by the appellant, the builder had neither handed over the possession of the flat to the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , being an immovable property never stood in his name and therefore provisions of Section 50C was not applicable. Appellant had only the "booking rights" in the said flat and has recovered back the booking amount as paid by him and hence provision of Section 50C are not applicable and therefore the A.O had erred in considering Rs. 41,45,255 as unexplained income of the appellant. 7. CIT (A) deleted the additions made by A.O. by observing as under:- " I have considered the facts of the case and the rival positions. I have gone through the tri party registered sales deed executed between the appellant, the builder and the new buyer and on going through the same it is seen that no registered document had been executed between the appellant and the builder in respect of purchase of flat No.701 but the appellant had only booked the said flat with the builder. Further, prior to the execution of the subject tri party registered sale deed in respect of flat No.701, the appellant had not acquired the possession of the said flat from the builder and the full consideration as agreed at the time of booking was also not paid. Thus it is evident from the registered sale deed itself that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the provisions of the said section since, there is no other evidence on record of any unaccounted income being received by the appellant. It is further seen that the provisions of section 50C of the I. T. Act are applicable in the case of an assessee when he transfers a capital asset being land or building or both, however, in the present case from the tri party registered sale deed it is explicit that the appellant has transferred only his booking rights in the said flat to the buyer and has not transferred the flat i.e. a capital asset land or building or both and therefore, the provisions of section 50C are not applicable in the case of the appellant. Accordingly, in view of the facts of the case, I hold that the provisions of section 50C of the Act are not applicable in the case of the appellant case, first of all the appellant had only given booking advance for flat No.701 to the builder and had neither entered into any registered purchase deed nor had taken the possession of the said flat from the builder and thus was not the owner of the said flat and secondly the appellant not being the owner of the said flat cannot be said to have transferred the same to the new b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus vehemently argued and urged that the order of CIT (A) should be set aside and that of A.O. be upheld. 11. Ld. A.R. on the other hand urged that section 50C is a deeming provision by virtue of which a legal fiction has been created. It is a settled law that legal fiction cannot be extended beyond the purpose for which it is enacted. Legal fiction is only for a definite purpose and they are limited to the purpose for which they are created and should not be extended beyond the legitimate field. 12. The Ld. A.R. further stated that what has been sold by the appellant was "booking rights" and not the flat. He stated that appellant cannot sell the flat because he never got the possession of the flat, He pointed to the agreement for sale dated 28-2-2006 that was entered into between appellant, the purchaser and the builder. He pointed out the recital clause of agreement wherein it has been stated that Appellant owing to certain unavoidable circumstances, could not make payment of balance amount to the Builder and as such could not avail the possession of the flat. He further stated that provisions of section 50C are applicable in the case of an appellant when he transfers a capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of leasehold rights is devoid of legally sustainable merits and is not supported by the plain words of the statute. Section 50C can come into play only in a situation "where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both is less than the value adopted or assessed or assessable by any authority of a State Government .... For the purpose of payment of stamp duty in respect of such transfer". Clearly, therefore, it is sine qua non for application of section 50C that the transfer must be of a "capital seet, being land or building or both", but then leasehold right in such a capital asset cannot be equated with the capital asset per se. We are therefore unable to see any merits in revenue's contention that even when a leasehold right in "land or building or both" is transferred, the provisions of section 50C can be invoked." 16. From the reading of Sec. 50C,it is evident that Sec. 50C is a deeming provision and it extends to only to land or building or both. Section 50C can come into play only in a situation where the consideration received or accruing as a result of the transfer by an appellant o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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