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TMI Blog2012 (4) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal is filed by the Revenue against the order of Ld. CIT (A) III, Surat dated 30-6-2009 for the Assessment Year 2006-07. 2. The only effective ground raised by the Revenue is as under:- On the facts and in the circumstances of the case and in law, the Ld. CIT (A)-III, Surat has erred in deleting the addition of ₹ 41,45,255/- holding that the A.O. has not mentioned section 50C of the I.T. Act. 3. The facts of the case are that the appellant is an Individual. The appellant filed his return of income on 8.1.2007 declaring total income of ₹ 80,050/-. The case was selected for scrutiny and the assessment was completed u/s 143(3) on 30.12.2008 by determining the total income at ₹ 42,25,305/-. During the course of assessment proceedings the Assessing Officer (A.O) noticed that on 25-6-2004 i.e. in the A.Y. 2005-06, 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 ₹ 15,99,000/- out of which ₹ 50,000/- was payable at the time of booking and the balance amount was payable in installments in such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant received back the booking amount paid by him to the builder, from the buyer. 5. During the course of assessment proceedings, the AO observed that the Jt. Sub Registar s Office Mumbai, had considered the value of the said flat at ₹ 57,57,255/- for registration of flat as against the total value of ₹ 16,12,000/- . Accordingly, on the basis of information received from office of the Jt. Registrar Office, Mumbai, the AO treated the difference amount of ₹ 41,45,255 (i.e. ₹ 57,57,255 ₹ 16,12,000/-) as the unexplained income of the appellant and made addition thereof to the total income of the appellant. 6. Aggrieved by the order of A.O, the appellant preferred appeal before CIT (A). Before CIT(A), appellant contended that as appellant had only paid booking amount and had neither taken possession nor had executed registered purchase document in his name, the flat, 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is transferring the possession and allotment of the said flat to the new buyer and thus, the transferor vendor of the capital asset i.e. the flat is the builder. However, the ITO only on the basis of information received from office of the Jt. Registrar Office, Mumbai, has treated the amount of ₹ 41,45,255 being the difference between the stamp duty valuation and the value as per the registered sale deed as the unexplained income of the appellant and made addition thereof to the total income of the appellant, by erroneously treating the appellant as the vendor transferring a capital asset being land or building or both. The ITO has not mentioned section 50C of the Act while making the said addition however, it is seen that the powers of substituting the stamp duty value for the actual sales consideration are provided only in section 50C of the I. T. Act and therefore, the impugned addition has been clearly made only as 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the provisions of section 50C would become clearly applicable. He further stated that the word transfer and capital asset has not been defined in section 50C and accordingly the meaning of these terms should be understood in the way in which it is defined in sec. 2(42) and Sec.2(47). He further stated that section 50C cannot be considered in isolation. He therefore, vehemently argued and contended that the sale made by appellant should be considered as sale of flat and not of booking right and accordingly Sec. 50C would be applicable and therefore the order of A.O. should be upheld. In support apart from various cases, he relied on the following decisions:- (1) CIT v. Narang Dairy Products (1996) 219 ITR 478 (SC) (2) CIT v. Mormasji Mancharji Vaid (2001) 250 ITR 542 (Guj) (FB) (4) J.K. Kashyap v. ACIT (2008) 302 ITR 255 (Del.) (5) Sanjaybhai Z Patel Vs ACIT (2011) 48 SOT 231 (Ahd) (6) Ferdoon Irani Vs ITO (1986) 15 ITD (Bom) 627 10. Ld. D.R. 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 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lat as also the legal ownership thereof to the new buyer and the appellant only received back the booking advance paid by him to the builder, by relinquishing his booking right on the said flat. 14. Sec.50C reads as under:- 50C. Special provision for full value of consideration in certain cases. (1) 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 by any authority of a State Government (hereinafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. 15. In the case of DCIT vs Tejinder Singh (supra) it has been held as under: 8 . Revenue s contention that the provisions of section 50C also apply to the transfer 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 situati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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