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TMI Blog2016 (8) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee firm, indicating that the assessee firm did not transfer full-fledged rights and interest in the said land to the lessee. Detailed discussion in this regard has been made by us at Para 7.1. of this order, which should read here also. Thus, keeping in view these facts also, we find that estimation of lease rent in substitution of actual lease rent received by the assessee was not justified in the given facts and circumstances of the case. Keeping in view the decision of Ld. CIT(A) in determining the full value of consideration of the asset at ₹ 3,22,334/-, we find that action of the Ld. AO in estimating the lease rent at ₹ 13,74,353/- was self contradictory and unjustified, and therefore the same is reversed - Decided in favour of assessee Guenity of lease transactions entered into by the assessee with Shradha Gyanpeeth Trust - Held that:- T(A) has recorded detailed findings for holding that impugned transaction was a transactions of lease only. Taking into account facts on record, it has been noted by the Ld. CIT(A) that lease deed is properly registered and stamp duty was paid as per Bombay Stamp Act, 1958. The lease deed was approved by BMC and State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was earlier an agricultural land, which was got converted to non-agricultural land, vide permission dated 15th September 2001. Thus, development and constructions work was not permissible unless such conversion was done. It has been further shown to us that development/construction expenses were incurred from A.Y. 2002-03 on words. It is further shown that payment to BMC or property tax or architect fee etc. have been incurred only after the commencement, development and construction of the project. We find that findings recorded by the Ld. CIT(A) are in accordance with law and facts on this issue. During the course of hearing before us it has been submitted that the requirement of the law is that project should be on the size of plot of land of minimum one acre, and here the area ‘project’ means project as proved by the local authority. It was shown to us on the basis of the document enclosed in the paper book that entire plot admeasuring 8612.40 sq. mts. was approved by the local authority as ‘housing project’, and commencement certificate was issued in respect of the entire plot. It was further shown to us that plot was sub-divided by BMC and some portion out of the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) in confirming the estimate made by the AO of lease rent at ₹ 13,74,353/- as against the actual amount received by the assessee. 4.1. The brief facts are that the assessee is partnership firm which was formed for the purpose of developing and constructing the building at Malad, Mumbai. During the year under consideration, the assessee firm had shown lease rent from the Shradha Gyanpeeth Trust for consideration of ₹ 251/- and 125/- for the portion of land given on lease to the send entity bearing no. 141B and 141C respectively, in pursuance to the lease deed dated 18.10.2002 entered with the said entity for a period of 99 years. The said transaction was treated as transfer covered u/s 2(47) by the AO. The AO also estimated the lease rent received by the assessee. 4.2. The assessee challenged all the actions of AO before Ld. CIT(A). It was inter alia held by Ld. CIT(A) that value of consideration was to be taken as the value as was adopted by the Stamp Valuation Officer. However, Ld. CIT(A) also estimated the lease rent on the basis of fair market value in substitution of the lease rent actually received by the assessee. 4.3. Being aggrieved, the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of payment of stamp duty in respect of such transfer would be deemed to be the full value of consideration received or accruing as a result of such transfer for the purposes of Section 48 unless that valuation is disputed in any appeal or revision before the higher authorities than the stamp valuation authority, court or high court. Since the value adopted by the stamp duty authority to the tune of ₹ 3,22,334/- for arriving at stamp duty ₹ 1250/- plus 3% of the value excess over ₹ 250,000/- of the total value is not challenged or disputed in any appeal or revision before any authority under the Bombay Stamp Act 1958 or court or High Court, the value of the impugned land for the purposes of stamp valuation is freezed with the amount of ₹ 3,22,333/- and becomes final and inter and it becomes the full value of consideration for the purposes of sec. 48 by virtue of the provisions of Sec.50C. There is no material on record to suggest that this valuation has been revised by any authority u/s 53A of the Bombay Stamp Act 1958 too. Thus, I do not find any merit in the part of ground of the appellant that Assessing Officer has erred in not referring it to District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble trust to do this job. Under these circumstances, the assessee firm gave said land to charitable trust that could run school effectively. It is further noted that the said lease was approved by the BMC and Maharashtra Government. The property records were still in the name of the assessee firm, indicating that the assessee firm did not transfer full-fledged rights and interest in the said land to the lessee. Detailed discussion in this regard has been made by us at Para 7.1. of this order, which should read here also. Thus, keeping in view these facts also, we find that estimation of lease rent in substitution of actual lease rent received by the assessee was not justified in the given facts and circumstances of the case. 4.9. Thus, taking into account all the facts and circumstances of the case and the judgments in the case of Lake Palace Hotels Motels Ltd. (supra) and also keeping in view the decision of Ld. CIT(A) in determining the full value of consideration of the asset at ₹ 3,22,334/-, we find that action of the Ld. AO in estimating the lease rent at ₹ 13,74,353/- was self contradictory and unjustified, and therefore the same is reversed. Ground no.2 of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all the facts of the case, material placed before us for our consideration and detailed and well reasoned findings of Ld. CIT(A), we find that no interference is called for in the order of Ld. CIT(A) and same is upheld on this issue. Ground no.1 of Revenue s appeal is dismissed. 8. Ground No.2: In this ground, the Revenue has challenged the action of Ld. CIT(A) in directing the AO to adopt the market value of the property at ₹ 3,22,334/- on the basis of stamp value of the lease deed as was assessed by the Stamp Valuation Authority as per Bombay Stamp Duty Act, 1958. 8.1. During the course of hearing, it has been argued by the Ld. DR that value for transfer of immovable property if the same is transferred by way of sale is different from the value if same is transferred by way of lease. He submitted that as per section 50C, value of sales consideration should be adopted as if the transfer is by way of sale. 8.2. We have gone through these submissions made before us and provisions of law as contained in section 50C in this regard. We do not find force in the arguments made by the Ld. DR on this issue. We have already held that the impugned transaction is a transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear mandate of the law is that the value adopted or assessed by the Stamp Valuation Authority shall be adopted for determining full value of consideration. Even, otherwise the word assessable has been added w.e.f. 01.10.2009, and the case before us pertains to A.Y. 2003-04 i.e. prior to 01.10.2009 and therefore only preamended law shall be applied in the case before us. 8.3. Thus, keeping in view the facts of the case and the clear position of law before us, we find that action of Ld. CIT(A) in adopting the value as adopted by the Stamp Valuation Authority under the Bombay Stamp Act 1958, for the purpose of determining full value of consideration is justified, and the same is upheld. Ground no. 2 of Revenue s appeal is dismissed. 9. Ground No.3: This ground is general does not require any specific adjudication, and therefore dismissed. ITA No. 1140/Mum/2011 Assessee s Appeal for A.Y. 2006- 07: 10. The Grounds raised and issues arising in this appeal are identical to A.Y. 2003-04. No distinction has been made out by either party before us. Thus, AO is directed to follow our order for A.Y. 2003-04 here also. 11. The assessee has raised additional ground which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 here also. Assessee s appeal in ITA No.1160/Mum/2011 CO No.182/Mum/2013 for A.Y. 2007-08: 13. It is noted that grounds raised in assessee s appeal and Cross Objection filed by it are identical to the grounds raised for A.Y. 2003-04. The AO is directed to follow our order for A.Y. 2003-04 here also. 14. The assessee has raised additional ground as under: Without prejudice to above, assessee has undertaken housing project which is the eligible for deduction u/s 80IB(10) and hence, if the amount of ₹ 62,39,236/- is held to be taxable in the impugned year i.e. A.Y. 2007-08 (as per the project completion method), then the consequential deduction u/s 80-IB(10) may be granted. 15. The additional ground raised is identical to the ground raised in A.Y. 2006-07, therefore, following our order for A.Y. 2006-07, this ground is admitted and sent back to the AO for afresh adjudication with the same directions as are given above in our order. Additional ground is partly allowed for statistical purposes. ITA No.1336/Mum/2011 Revenue s Appeal for A.Y. 2007- 08: 16. Ground No.1: In this ground, the Revenue has challenged the action of Ld. AO in allowi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted by the local authority on 15.03.2002 and a separate notice was given to BMC thereafter only. It has been further shown to us that the land was earlier an agricultural land, which was got converted to non-agricultural land, vide permission dated 15th September 2001. Thus, development and constructions work was not permissible unless such conversion was done. It has been further shown to us that development/construction expenses were incurred from A.Y. 2002-03 on words. It is further shown that payment to BMC or property tax or architect fee etc. have been incurred only after the commencement, development and construction of the project. We find that findings recorded by the Ld. CIT(A) are in accordance with law and facts on this issue. Our view finds support from the decisions of the Tribunal in the case of Smt. Manju Gupta vs. ACIT 134 ITD 503 (Mum) and Nirmiti Constructions v. DCIT 4 SOT 383 (Pune). 16.4. Other objection of the Ld. AO was that housing project was constructed on plot of land admeasuring 3,200 sq. meters, and thus, not meeting the stipulated minimum areas of one acre as prescribed u/s 80-IB(10)(b) of the Act. It is noted by us that Ld. CIT(A) has met this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed limit u/s 80IB. Similar view has been taken in the case of Bunty Builders vs ITO 127 ITD 286 (Pune) and Haware Engineers Builders P. Ltd. v. ACIT 46 SOT 27 (Mum)(URO). Thus, keeping in view the facts, the documentary evidences brought before us, un-assailed factual findings of Ld. CIT(A) and aforesaid judgments placed before us, we find that no interference is called for in the order of Ld. CIT(A) and therefore same is upheld, and therefore ground no. 1 of Revenue s appeals is dismissed. 17. Ground No.2: This ground deals with action of Ld. CIT(A) in directing to take ALV of ₹ 13,74,353/-. It has already been held by us while adjudicating the appeal of the assessee that it was not permissible under the law to make estimate of lease rent in the given fact of this case and the addition made by the AO in this regards was deleted in full, and therefore, this issue raised by the Revenue becomes academic in nature, and therefore, ground no.2 of Revenue s appeal is dismissed. 18. Ground No3: This ground is general and does not require any specific adjudication, therefore dismissed. 19. In the result, appeal filed by the Revenue is dismissed, and assessee s ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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