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TMI Blog2017 (8) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... of the law. As far as applicability of section 50C is concerned it is sufficient to say that provision of the said section were not applicable to the facts of the case under consideration - Decided in favour of assessee. - I.T.A. /2608/Mum/2009, ./I.T.A. /2999/Mum/2009, I.T.A. /3000/Mum/2009, I.T.A. /4811/Mum/2009, I.T.A. /484/Mum/2009 - - - Dated:- 21-6-2017 - Sh. Rajendra,Accountant Member and C. N. Prasad,Judicial Member For The Revenue : Smt. Arzo Garodia-Sr. AR For The Assessee : Shri Sunil Moti Lala K. Gopal Per Rajendra A.M. - Challenging the order dated 20/02/2009 of the CIT(A)- XIV,Mumbai,the assessee(Nalin P Shah)and the Assessing Officer(AO)have filed cross appeals for the year under considera - tion.Effective ground of appeal,raised by the AO, is about deleting the addition made under the head capital gains.The AO has filed the appeals in case of the two other co-owners of the same property.Thus,there are five appeal/cross appeals before us where the main issue is taxability of sale proceeds of a plot of land.There are certain other issues in the appeal/cross appeals.We have decided to dispose all the appeals together for sake of convenience ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation was not possible as the assessee was not ready to cooperate. In the absence of the valuation report, the AO by relying upon the judgment of the Hon ble High Court of Calcutta in the case of Sanahagar Lights (208 ITR 882) adopted the fair market value of the property As per the Stamp Duty Ready Reckoner, 2002 and determining the total value at ₹ 6.85 crores.Share of the assessee at 20% was worked out at ₹ 1.37 crores and was taxed under the head capital gains. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA).He made elaborate submissions and referred to certain case laws in his support. He filed certain additional documents before the FAA and requested him to admit the same as per the provisions of Rule 46A of the Income Tax Rules, 1962. The FAA called for remand report from the AO in the light of the submissions of the assessee. He provided a copy of the report of the AO to the assessee. Again he called for a report from the AO and obtained comments of the assessee before finalising the appeal. After considering the available material, the FAA held that the assessee had argued that agreement to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that the amount in question had to be taxed in the hands of the assessee. He directed the AO to advocate the forfeited amount to the income of the assessee. He further observed that the AO, while determining capital gains in the hands of the assessee, had adopted the sale considera - tion on the basis of fair market value as per the Stamp Duty Ready Reckoner, 2002. After considering the submissions of the assessee he held that the purchaser had confirmed the total consideration to be at ₹ 18.75 lakhs only, that there had not been any registration and evaluation by the Stamp Duty authorities, that the provisions of section 50C were not applicable, that the AO was not justified in referring to the ready reckoner, there was no transfer of plot of land within the meaning of section 2 (47) Read with section 53A of the Transfer of Property Act, that the question of capital gains would not arise. He allowed the ground of appeal, about applicability of section 50C, in favour of the assessee for statistical purposes. 5 .During the course of hearing before us, the departmental representative (DR) supported the order of the AO and stated that there was transfer of plot of land. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.75 lakhs, that the AO had made a reference to the valuation officer, that valuation officer reported that the assessee was not co-operating, that the AO referred to the ready reckoner, 2002 and determine the fair market value of the plot of land at ₹ 6.85 crores, that he determined the share of the assessee at ₹ 1.37 crores, that the FAA called for two remand report s from the AO, that he held that provisions of section 50C were not applicable, that he held that amount received by the assessee should be taxed in his hands under the head forfeiture of advance received. There is no doubt that agreement to sell the plot of land was not registered with the stamp duty authorities. Even the buyer of the plot admitted that registration had not taken place. Secondly,the buyer had not adhered to the payment schedule. It is also a fact that as per the revenue records the assessee and the other co-owners of the owner of the plot of land though the possession of the plot is with the buyer.Considering these peculiar facts and circumstan - ces we are of the opinion that there was no transfer of plot of land as envisaged by the provisions of section 2 (47) of the Act read with s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in relation to transactions undertaken on or after such date. 9. Learned counsel for the Revenue is not disputing about the existence of such circular issued by the Board. If the Board has issued a circular clarifying the applicability of section 50C in pursuance of the amendment made by the Amendment Act 2 of 2009, we fail to understand as to how the Revenue can canvass the same issue in this case which in effect is against the circular issued by the Board. Certainly, the Revenue is bound by the circular issued by the Board. .. XXX The insertion of the words or assessable in section 50C of the Income-tax Act, 1961, with effect from October 1, 2009, is neither a clarification nor an explanation to the existing provision and it is only an inclusion of new class of transactions, namely, the transfer of properties without or before registration. Before the amendment, only transfer of properties where the value was adopted or assessed by the stamp valuation authority were subjected to section 50C application. However, after introduction of the words or assessable such transfers where the value is assessable by the valuation authority are also brought into the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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