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TMI Blog2016 (3) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... right to subscribe for additional shares/debentures, the crucial date is the date on which such right to subscribe for additional shares/debentures comes into existence and the date of transfer i.e. renunciation of such right. - Decided against the assessee - ITA No. 62 of 2011 - - - Dated:- 14-1-2016 - MR. AJAY KUMAR MITTAL AND MRS. RAJ RAHUL GARG, JJ. For The Appellant : Mr. Ravish Sood, Advocate For The Respondent : Mr. Rajesh Katoch, Advocate Ajay Kumar Mittal,J. 1. This appeal has been preferred by the appellant-assessee Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 30.4.2010, Annexure A.3 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, the Tribunal ) in ITA No.471 (ASR)/2009 for the assessment year 2006-07. It was admitted on 17.7.2012 to consider following substantial question of law:- Whether the Tribunal has erred in law by failing to appreciate that as the 'Pre-amended' deeming provisions of Section 50C of the Income Tax Act, 1961 (i..e. those as were available on the statute upto 30.9.2009) did not take within its purview 'Agreement to Sell', therefore t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable on the basis of sale deed dated 10.5.2005. It was further submitted that agreement to sell is dated 3.11.2004 and therefore by virtue of Explanation 2 to Section 2(47) of the Act, it could not be taxed in the assessment year 2006-07. 4. On the other hand, learned counsel for the revenue besides supporting the order of the Tribunal submitted that the rate of registering authority was much more. 5. We have heard learned counsel for the parties. We do not find any infirmity in the order of the Tribunal and as a consequence there is no merit in the submissions of learned counsel for the assessee-appellant. 6. Finance Act, 2002 effective from 1.4.2003 inserted Section 50C in the Act. The said section as inserted at the relevant time reads thus:- 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 (hereafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee claims before the Assessing Officer that the value adopted or assessed by the Stamp Valuation authority under Section 50C(1) exceeds the fair market value of the property as on the date of the transfer; and the value so adopted or assessed by the Stamp Valuation authority under Section 50C (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer. Wherever any reference is made to the Valuation Officer, the various provisions of the Wealth Tax Act, 1957 enumerated thereunder shall apply. 9. Sub section (3) of Section 50C of the Act is subject to the provisions contained in Section 50C(2) and enacts that where the value determined under Section 50C(2) exceeds the value adopted or assessed by the Stamp Valuation authority referred under Section 50C(1), in that eventuality, the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. 10. The provisions of Section 50C of the Act are deeming provisions for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and subsequent years (section 24) 12. Adverting to the factual matrix herein, a perusal of the findings recorded by the authorities below shows that the Assessing Officer computed the capital gains in respect of the appellant firm by invoking the deeming provisions of section 50C of the Act by adopting the segment rate of ₹ 22 lacs i.e. rates adopted by the stamp valuation authority at the time of executing the sale deed as the deemed sale consideration and calculated that the capital gains was shown short by an amount of ₹ 17,64,189/-. On appeal, the CIT(A) held that as per provisions of Section 50C of the Act, if the value estimated by the Assistant Valuation Officer (AVO) is more than that as per the collector rates, the latter should be taken to be the full value of consideration. However, if the value estimated by the AVO is less than that as per the collector rates, that lesser value is to be taken into account. Consequently, the fair market value as on 10.5.2005 estimated by the AVO at ₹ 18,16,250/- was taken to be the full value of consideration as against ₹ 22 lacs considered by the Assessing Officer for computing long term capital gain. The Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration received. The assessee has not produced any evidence regarding the dispute of valuation adopted by the registering authority of the State Government. Hence the valuation so adopted i.e. at ₹ 22 lacs has been accepted by the nearby people as the correct value, hence the same is adopted. As regards the copy of agreement dated 3.11.2004 filed by the assessee at a lesser sale value is concerned, it is pertinent to mention here that this agreement by the Notary Public attached with the return bears the same date on which the registration has been made i.e. 10.5.2005. Hence this evidence is created after thought and it has no value in the eyes of law so far as the value of property sold vide registration deed 10.5.2005, for a consideration of ₹ 22,00,000/- on account of deeming provisions as per section 50C of the Income Tax Act, 1961 although the sale rate was shown at ₹ 12,00,000/- as per registry. Therefore, the contention of the assessee has no force and is not acceptable. 11(12). From the above, it is clear that the AO recorded finding that the possession of the said land was handed over to the purchaser on 10.5.2005. In view of the above discussion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal owner. Legal owner in this case vested in the purchaser of the land, on the registration of the sale deeds on 10.5.2005. Further, the sale agreement does not speak handing over of the possession to the purchaser of the land. In view of this, facts of the case relied upon by the learned counsel for the assessee, in the case of CIT vs. Podar Cement Pvt. Limited (supra) are different and distinguishable. Thus, ratio of this case is not applicable to the facts of the present case. Moreover, the Hon'ble Supreme Court, has rendered the decision in the context of charging of income under section 22 of the Act and has never dealt with the definition of 'transfer of asset', as contemplated under section 2 (47)(v) of the Act. For the purpose of proper appreciation of the decision of the Hon'ble Supreme Court, in the case of CIT vs. Podar Cement Pvt. Limited (supra), the relevant part of the decision is reproduced hereunder:- House property owner meaning of owner - in the context of section 22 owner is person who is entitled to receive income in his own right Section 22 does not require registration of sale deed Amendment of section 27 by Finance Act of 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by contending that it was taxable in the assessment year 2005-06 on the basis of retrospective amendment by incorporating Explanation 2 to Section 2(47) by Finance Act, 2012 which is made effective from 1.4.1962. Learned counsel for the assessee-appellant was unable to substantiate that on the basis of sale deed dated 10.5.2005, the capital gains could not be taxed in the assessment year 2006-07 and equally had failed to demonstrate that the provisions of section 50C of the Act were not applicable particularly when the AVO had assessed the fair market value at ₹ 18,16,250/-. The assessee itself having chosen to discharge capital gain tax liability in the assessment year 2006-07 cannot now rely upon Explanation 2 to Section 2(47) inserted retrospectively from 1.4.1962. 15. Learned counsel for the appellant has not been able to show any illegality or perversity in the findings recorded by the authorities below warranting interference by this Court. Learned counsel for the appellantassessee relied upon judgments in CIT vs. India Discount Co. Limited, (1970) 75 ITR 191 and Navin Jindal and others vs. Assistant Commissioner of Income Tax, (2010) 320 ITR 708. In India Discount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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