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TMI Blog2013 (1) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicability of provisions of sec. 50C to the transaction of sale of the property effected by the assessee - assessee appeal - Held that:- Sec. 50C is a deeming provision and hence, the question of gift of property does not arise. There is no finding that the assessee has transferred the asset for inadequate consideration, which may possibly result in gift. On the contrary, sec. 50C only contemplates only substituting the sale consideration. Thus even if for a moment, the contention of gift is accepted in the present case, the question that arises is what was actually gifted. The entire property has been sold for a consideration of Rs.4.82 crores as against the stamp duty value of Rs.5.67 crores. Hence the difference between both the amounts has to be treated as constructive of receipt of money in the form of cash by the assessee and constructive payment of money in the form of gift to the Trust. Since the transaction of gift is considered as taken place in the form of gift, the provision of sec. 47(iii) shall not apply to it - against assessee. - ITA No.80/Coch/2011 & ITA No.17/Coch/2011 - - - Dated:- 14-9-2012 - N.R.S. Ganesan and B.R. Baskaran, JJ. Appellant Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax took the view that the main object of the assessee company is not the business of operating ships and accordingly, vide his order dated 28-01-2005, he rejected the application filed by the assessee. The Addl. CIT came to the said conclusion for the following two reasons:- (a) The Memorandum and Articles of Association contains 73 objectives out of which business as shippers, shipping agents etc. is only one of the several objectives and is not the main objective. (b) The ship charter receipts (turnover) forms only a small portion out of the gross receipts(turnover) of the company from various divisions. 4. The assessee challenged the said decision by filing a Writ Petition before the Hon ble Kerala High Court. The assessee also filed appeal before the Ld CIT(A) in the regular course. The Jurisdictional High Court held that the order of the Addl. CIT to the extent it holds that the business of operating ships is not a main object of the Petitioner-company, going by its Memorandum, is illegal. The said decision of the High Court is reported in (2009) 312 ITR 31. 5. With regard to the second ground relating to the proportion of shipping receipts vis- -vis gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rival contentions on this issue. It is an undisputed fact that the assessee company has filed the application in Form No. 65 before the Addl. CIT on 03-12-2004 opting for tonnage tax scheme u/s. 115VP(1) of the Act. Hence, in our view, it would be correct and justifiable only to consider the data that were available as on that date in order to ascertain whether the main object of the company is to carry on the business of operating ships or not. However, we notice that the Ld. CIT(A) has considered the financial accounts relating to 31-03-2005, 31-03-2006 and 31-03-2007 and held that the main objective of the assessee company is to carry on the business of operating ships. As stated earlier, the assessee company filed its application on 03-12-2004, on which date the data pertaining to 31.3.2005, 31.3.2006 and 31.3.2007 would not be available before the Addl. CIT. Hence, in our view, the Ld CIT(A) is not correct in considering data pertaining to the subsequent periods. For the sake of convenience, we extract below the relevant observations of the Ld. CIT(A):- 11.8 On a careful consideration of facts and records, the accounts and profit positions for various years vis- -vis sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer to tax the capital gain as per the provisions of sec. 50C of the Act. 10. The facts relating to the same are stated in brief. In the return of income, the assessee declared long term capital gain of Rs. 2,53,33,605/-. The Assessing Officer noticed that one of the assets sold by the assessee was a property consisting of land measuring 23980 sq. ft and a building thereon, which was located at Race Course Road, Coimbatore. The said property was sold for a consideration of Rs. 4,82,20,200/-. It was noticed that the value determined by the Stamp authorities for the purposes of stamp duty was Rs. 5,67,63,700/-. Accordingly, the Assessing Officer, by invoking the provisions of sec. 50C, took the sale consideration as Rs.5,67,63,700/-, being the value fixed by the Stamp authorities for the stamp duty purposes. The decision of the Assessing Officer was confirmed by the Ld. CIT(A). The contention of the assessee before the Ld. CIT(A) was that the assessee has sold the impugned property to a charitable trust, which enjoys the benefits of provisions of sec. 80G of the Act. Accordingly, it was contended that the difference between the value determined by the Stamp authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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