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TMI Blog2017 (9) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... in in total consideration of the payment after sale agreement was determined as ₹ 1.35 crores and it cannot be assessed. Therefore, both the authorities have committed no error in reaching the conclusion. Neither the stamp authority has assessed the complete charges because transaction has not taken place, and in our considered opinion, the valuation which was determined by the AO is nothing but harassment to the honest tax payers of a transaction which has been rightly reversed by the CIT(A) and confirmed by the Tribunal. In this view of the matter, both the CIT(A) and Tribunal have not committed any error. The issue is answered in favour of the assessee and against the department. - D.B. Income Tax Appeal No. 328 / 2011 - - - Dated:- 24-7-2017 - HON'BLE MR. JUSTICE K.S. JHAVERI AND HON'BLE MR. JUSTICE INDERJEET SINGH For the Appellant : Mr. Sameer Jain For the Respondent : Mr. Sanjay Jhanwar with Ms. Archana. Order 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the tribunal has dismissed the appeal of the department and the C.O. of the assessee is partly allowed. 2. While admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of this section, Valuation Officer shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). 88 [Explanation 2.-For the purposes of this section, the expression assessable means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty.] (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed 88[or assessable] by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed 88[or assessable] by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.] Section 2(47)Transfer-U/s 2(47) of Income-tax Act 1961, the term transfer has been defined as Transfer in relation to a capital asset includes : (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of the assessee by Smt. Pushpa Kedia and the assessee made payment of ₹ 62,70,975/- to Smt. Pushpa Kedia on execution of power of attorney in his favour. The power of attorney was duly registered before the Sub-Registrar and the Sub-Registrar has assessed the value for registration of power of attorney at ₹ 1.35 crores. 2. The assessee executed an agreement in favour of M/s. Rising Build Estate Ltd. and transferred all the right acquired under the power of attorney on consideration of ₹ 70.00 lacs. This Registration was presented for registration before the Stamp Duty authority. 3. The assessee has not transferred any immovable property but has transferred the right of purchase of immovable property. The assessee neither received the possession of property nor has any control been acquired on the property. 4. Section 50C is applicable in respect of transfer of capital asset being land or building or both while in the instant case the assessee has neither transferred any land nor transferred any building. 5. The assessee has not presented the agreement executed in favour of M/s. Rising Build Estate Ltd. for registration before the Stamp Duty Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been included w.e.f. 1-10-2009. The memo explaining provision of Finance (No.2) Bill, 2009 (refer to 314 ITR 214 St.) states that the word assessable has been added so that the transactions which are executed through agreement to sell power of attorney are covered u/s 50C of the Act. It will be useful to reproduce the relevant portion from the memo explaining the provisions of Finance (No.2) Bill, 2009. The existing provisions of Section 50C provide tht where the consideration received or accruing as a result of the transfer of a capital asset, being land or building or both, is less than the value adopted or assessed by an authority of a State Government (stamp valuation authority) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for computing capital gain. However, the present scope of the provisions does not include transactions which are not registered with stamp duty authority, and executed through agreement to sell or power of attorney. With a view to preventing the leakage of revenue, it is proposed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al fiction cannot extend beyond the purpose for which it is enacted. Hence the legal fiction created in Section 50C cannot be applied in respect of transfer of capital asset other than land or building including the rights in land and building just like tenancy right. In the instant case, the assessee has not received consideration on account of transfer of land and building but has received consideration in respect of tranfer of purchase agreements. The Jaipur Bench in the case of Vijay Luxmi Dhadia, 20 DTR 365 held that Section 50C will not apply if the transfer document is not stamped. The plots are still to be registered with Stamp Valuation authorities. The Ld. CIT(A) has clearly observed that the word assessable has been inserted in Section 50C of the Income Tax Act by the Finance (No.2) Act, 2009 w.e.f. 01.10.2009. The consideration as adopted by the stamp valuation authority can be taken as full consideration if the value adopted by the stamp valuation authority is assessable w.e.f. 1.10.2009. The assessment year under reference is 2006-07 and therefore, the amended provisions of Section 50C is not applicable. In the memo explaining the provisions of Finance (No.2) Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enhancement in the quantum of short term capital gain and accordingly the appeal of the Revenue is dismissed. 2.9 The assessee has raised the cross objection. In the C.O., it is mentioned that the ld. CIT(A) is not justified in holding that transaction is regarded as transfer attracting Section 50C of the Act. We had already discussed this issue. We had already held that it is case of transfer of land. Section 50C of the Act is not applicable because the substituted word assessable is applicable in respect of transfer of transaction after 1-10-2009. Thus the C.O. of the assessee is partly allowed. 6. He contended that the Tribunal has committed serious error in interpreting Section 50(C) and has travelled beyond the observations which are made by the CIT(A) in para 2.3. Same reads thus:- 2.3 I have carefully considered the facts of the case and submissions of Ld. AR. However, on perusal of the relevant material on record, In find that the contentions/ submissions/ arguments of the Ld. AR, raised in support of this ground of appeal, are not fully acceptable. In this regard, the following observations are made. (i) As far as the claim of Ld. AR that the purchase and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said property to the buyer on 13.11.2006. Therefore, the said transaction is also to be treated as transfer in terms of the provision of S.2(47) of the I.T. Act. Hence, the contention of Ld. AR that the said transaction was merely a part of a financial arrangement, and not actual sale, is rejected. However, it is noted that there is no dispute regarding the fact that the said sale agreement dated 13.11.2006 was not registered and, therefore, the concerned Registering Authority had not determined the value of the sold property for the Stamp Duty purposes, with reference to the aforesaid sale agreement dated 13.11.2006 (wherein the appellant is a seller ). Hence, there is substance in the argument of Ld. AR that the provisions of S.50C of the Act were not applicable in such situation, because where the Registering Authority had not determined the value of the sold property, the actual sale amount (as per the sale agreement) cannot be substituted by some other amount. It is observed that the said contention of ld.AR is supported by the decisions of Hon ble ITAT Jaipur Bench in the case of ITO v/s Sh. Anurag Mishra, ITA No.878/JP/2007, dated 20.06.2008 and of Hon ble ITAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction which are not registered with stamp duty valuation authority and executed through agreement to sell or power of attorney. Consequently, it is made clear therein that the amendments have been made applicable with effect from 01.10.2009 and therefore, they will apply only in relation to transaction undertaken on or after such date. The relevant portion of the circular is extracted hereunder: 23.4. Applicability:- These amendments have been made applicable with effect from 1st October, 2009 and will accordingly, apply 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 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. At this juncture, it is pertinent to note that in a decision made in the case of State of Tamil Nadu and another Vs. India Cements L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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