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TMI Blog2014 (2) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... being land or building or both - On perusal of above section 50C, shows that the provisions are applicable only in respect of capital asset, being land or building or both and there is no reference that the said provisions is applicable to stock in trade - There is no infirmity in the order of the CIT(A) to hold that the provisions of section 50C are not applicable to the property under consideration - The department has also not brought any material on record that the sale value as per agreement for sale of development rights under the facts and circumstances of the case is not genuine – thus, the order of the CIT(A) upheld – Decided against Revenue. - ITA No.5686/Mum/2012 - - - Dated:- 14-2-2014 - Shri N. K. Saini, AM And Dr. S. T. M. Pavalan, JM,JJ. For the Appellant : Shri M. L. Perumal For the Respondent : Shri Mayur Makadia ORDER Per N.K.Saini (AM) : This is an appeal by the department against the order dated 05.06.2012 of the Commissioner of Income-tax (Appeals)-35, Mumbai. 2. Only issue involved in this appeal is as to whether the provisions of section 50C of the Income-tax Act, 1961 (hereinafter referred to as the Act ) are applicable or not, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at Rs.4,99,50,000/- by the stamp duty authority was on higher side. The AO did not find merit in the submissions of the assessee and observed that the Valuation Officer vide order dated 07.12.2010 u/s 50C of the Act in the case of Shri Chandulal P.Patel, who is the co-owner of the said property (on the basis of which the assessee s case was reopened) determined the fair market value at Rs.1,30,91,000/-. He accordingly worked out the share of the sale consideration in assessee s hand at Rs.37,40,286/- as long term capital gain and added the same to the income of the assessee. 4. Being aggrieved, the assessee carried the matter to the learned CIT(A) and reiterated the submissions made before the AO and further submitted that in the case of the assessee s husband, the learned CIT(A)-18, Mumbai, vide order dated 06.02.2012 has held that the intention of the assessee was to develop the property and make profit out of the same and by relying on the decision of Inderlok Hotels (P) Ltd. v. ITO 32 SOT 419 (Mum) and CIT v. Thiruvengadam Investments (P) Ltd. 320 ITR 345 (Mad) held that the provisions of section 50C of the Act were not applicable to the facts of the case. 5. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e more weightage in the eyes of law as compared to the agreements 19.09.1992 and 10.04.1993 which are unregistered and have been entered on a stamp paper of Rs.10/- each and therefore, according to me the ARs argument that the ownership rights were never with the appellant is correct. 6.2.12. Coming to the Assessing Officer s objection that the possession of the property was with the appellant is also misplaced as the Hon ble Mumbai City Civil Court vide its Order Dt.20.10.1993 in Notice of Motion No.2639 of 1990 in Suit No.3573 of 1990 filed by Shri Lalji Lachchmandas claiming to be a tenant and in possession of the property has recognized him as having physical possession over the land and has granted prevented the owners from dispossessing him of the said land. Thus, in view of the said order of the Hon ble Mumbai City Civil Court, even the physical possession of the property is not with the appellant. 6.2.13. Coming to the next objection of the Assessing Officer that the claim of the appellant to come out of prolong litigation, the property was transferred to a firm, M/s.Jajodia Patel and Properties is not acceptable as the son of the appellant is a partner in the said fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontents of relevant agreements entered into by the assessee dated 6th June, 1992 and 10th April, 1993, development agreement entered into between assessee and others with M/s Jajodia and Patel Properties as well as copies of the trial balance, copy of the order of the City Civil Court, Bombay dated 20th October, 1993 and written submissions filed by the assessee before the authorities below. 9. We observe that the Ld. DR has not disputed the fact that the assessee has disclosed the property in trial balance for all the years from 2000-01 to 2005-06 as part of stock in trade. We also observe that during the course of assessment proceedings for earlier year i.e. assessment year 2006-07, the AO, himself observed that the assessee was in the business of construction and development rights purchased by the assessee is part of stock in trade. On perusal of the relevant pages of the paper book, placed before us, we agree with the Ld. AR that the property was affected with innumerable court proceedings and the assessee could not get possession of the said property till the date the assessee transferred his rights in the said property to M/s Jajodia and Patel Properties, vide agreement da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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