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TMI Blog2014 (2) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had not challenged the assessment order wherein the A.O., had stated that reference u/s 50C was made to the Valuation Officer and the working of the capital gain was subject to rectification u/s 154 of the I.T. Act on receipt of the Valuation Report. 2. The Ld. CIT(A) has erred in accepting the contention of the assessee which was made at the appellate stage for the first time that the reference made by the A.O., u/s 50C of the I.T. Act was incorrect without appreciating the fact that the assessee had neither raised any objection during the assessment proceedings nor during the rectification proceedings and in fact the assessee had accepted the proposed rectification on the absis (basis) of valuation report during the rectification pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 50C are applicable. 6. In so far as applicability of section 50C is concerned, the CIT(A) held, "At the first instance, the agreement for surrender of tenancy rights was not registered before the sub register of Stamps and Assurances. The agreement not having been registered, there is no value that was adopted or assessed by the stamp valuation authorities, which has to be considered as full value of consideration u/s 50C of the Act. It is only w.e.f. 1.10.2009 unregistered sale agreements were also brought into the purview of section 50C. In view of the above, the impugned transaction is not covered by the provisions of section 50C and therefore, the AO cannot make a reference for valuation of the property under the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of computing capital gains from the impugned transaction". 7. This issue also became a subject matter of appeal before coordinate Bench at Mumbai in the case of Kishore Sharad Gaitonde vs ITO, in ITA no. 1561/Mum/2009, wherein it was held that provisions of section 50C does not apply on tenancy rights. The coordinate Benches followed the decisions of the Hon'ble Supreme Court in 155 ITR 171, CIT vs. Mother India Refrigeration Industries Ltd., reported in 155 ITR 171, wherein the ratio decided was, scope of legal fiction is confined for the purpose for which it is introduced and the case of Orissa Sate Warehousing Corp. vs CIT, reported in 257 ITR 589. 8. On the other issue, as to how the AO increase the surrender considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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