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TMI Blog2017 (9) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... of transfer of purchase agreements. The Jaipur Bench in the case of Vijay Luxmi Dhadia, [2008 (9) TMI 944 - ITAT JAIPUR] 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. AO was not justified in applying the provisions of Section 50C of the I.T. Act for increasing the short terms capital gain. The Ld. CIT(A) was justified in deleting the increase in the value of short term capital gain. It is not the case of the Revenue that the assessee has received more consideration as shown in the agreement. In case there was any evidence to show that the consideration received by the assessee was more than the consideration me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 50C of the I.T. Act, 1961? 3. For the sake of convenience, Section 50(C) Explanation 2 which is strongly relied upon by the appellant and Section 2(47) of the Income Tax Act is reproduced as under:- 50C. (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 86[or assessable] 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 respect of such transfer, the value so adopted or assessed 86[or assessable] shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed 86[or assessable] by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed 86[or assessable] by the stamp val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in section 53A of the Transfer of Property Act, 1882; or (vi) any transaction (whether by way of becoming a member of, a acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of, any immovable property. (vii) maturity or redemption of a zero coupon bond. 4. He and contended that the tribunal has seriously committed an error in dismissing the appeal of the department in as much as the grounds raised by the revenue in para 2.1 reads as under:- 2.1 The ground of appeal raised by the Revenue is as under:- On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in holding that the provisions of Section 50C of the I.T. Act, 1961 are not applicable in the case of the assessee and thereby deleting the addition of ₹ 65.00 lacs made by the AO u/s 50C of the I.T. Act, 1961. The contentions raised by the assessee are as under: 2.2 The assessee has shown the long term capital gains of ₹ 7,29,025/- on sale of agriculture land at Jaipur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. It was further argued that capital gain is not chargeable in in case the asset which is transferred has no cost at all. 5. He has taken to us the observations made by the Tribunal in para 2.6 2.8 and 2.9 which are as under:- 2.6 We have heard both the parties. The copy of general power of attorney is available at pages 12 to 14 of paper book filed by the ld. AR. As per this general power of attorney, the assessee was given authority to get different actions executed on behalf of the owner .The genera power of attorney was authorized to apply for approval u/s 90B and was also given authority to look after the land and to get NOC from JDA and to get the patta issued from JDA. It is true that general power was executed on stamp paper of ₹ 500/-. The Sub-Registrar registered this power of attorney at ₹ 1,07,800/- against stamp duty of ₹ 500/-. This general power of attorney has been cancelled vide cancellation deed dated 03.01.2007. The copy of this cancellation is available at pages 15 to 20 of the paper book. In the cancellation deed, it is not mentioned that general power of attorney has entered into an agreement for sale of land with M/s. Risin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for computing capital gain. Further, it is proposed to insert a new Explanation so as to clarify the meaning of the term assessable . This amendment will take effect from 1st October, 2009 and shall accordingly apply in relation to transactions undertaken on or after such date; 2.8The Jaipur Bench had occasion to consider the applicability of Section 50C in the case of transfer of land which has not registered. The Tribunal vide order dated 08.04.2011 in ITA No.1356/JP/2010 has held that Section 50C will not be applicable when transaction has not been registered with Stamp Duty Authority. It will be useful to reproduce para 2.4 of the Tribunal in the case of ITO Vs. Shri Shailendra Soni. 2.4 We have heard both the parties. During the course of hearing before us, the Ld. AR stated that the issue under reference is covered by the order or the Tribunal in ITA No.42/JP/2010 dated 08.06.2010. The Ld. AR filed the copy of the order. It will be useful to reproduce para 5 of the order dated 8th June, 2010 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 amend the Section 50C so as to provide that where the consideration received or accruing as a result of transfer of a capital asset, being land or building or both is less than the value adopted or assessed or assessable by an authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for computing capital gain. Further, it is proposed to insert a new Explanation so as to clarify the meaning of the term assessable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral land, measuring 1.80 Hectares (located at village Murlipura, Tehsil Sanganer), Jaipur, from Smt. Pushpa Kedia and Smt. Gulab Devi (sellers), for 62,70,975/, and also passed on the sale consideration to the said sellers, as well as, obtained possession of that property. The fact that the appellant had actually purchased the aforesaid property from Smt. Pushpa Devi Kedia and Smt. Gulab Devi is evident from the contents of para 2 on page 2 of the sale agreement dated 13.11.2006, entered into between the appellant and M/s Rising Build Estate Pvt. Ltd., Jaipur, wherein the appellant has confirmed to have purchased, and also to have taken possession, of the aforesaid property from Smt. Pushpa Kedia and Smt. Gulab Devi. Therefore, the said transaction has to be treated as transfer in terms of the provisions of S.2(47) of the I.T. Act. Thus, the aforesaid transaction was found to be in the nature of purchase of land and, hence, the contention of Ld. AR that the said transaction was only a part of a financial arrangement, and not actual purchase, is rejected. However, it is observed that at the time of the registration of the aforesaid transaction of agricultural land (purchase by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Real Build Estates Pvt. Ltd., Jaipur and thereby in substituting the sale value shown at ₹ 70,00,000/- in the sale agreement dated 13.11.2006 by ₹ 1,35,00,000/-. 7. He contended that the Tribunal has committed serious error in holding that the transaction under Section 50(C) was assessable which has now been incorporated in the amendment Act of 2009 w.e.f. 1.10.2009 and he has wrongly invoked the same and the benefits are wrongly granted in favour of the assessee. 8. Counsel for the respondent contended that the argument put forward by the department is misconceived, inasmuch as the transaction which is taken place was through power of attorney holder. The property was never transferred. Even before initiating proceeding under Section 50(C), the assessee has already paid the short term capital gain to the tune of ₹ 10 lacs and therefore the assessment which was made on complete consideration is without jurisdiction and therefore while interpreting the assessment, CIT(A) has rightly observed in para 2.3 which was reproduced hereinabove and correctly interpreted the provisions while relying on the decision of the Jaipur Bench in the case of ITO Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 are extracted hereunder: 21.It is manifest from the highlighted portion of the circular that as per the clarification issued by the Commissioner of Commercial Taxes, in exercise of the power conferred on him under Section 28A of the TNGST Act, the benefit of the sales tax deferral scheme would be available to a dealer from the date of reaching of BPV or BSV, whichever is earlier, as is pleaded on behalf of the first respondent. It is trite law that circulars issued by the Revenue are binding on the departmental authorities and they cannot be permitted to repudiate the same on the plea that it is inconsistent with the statutory provisions or it mitigates the rigour of the law. 22.In Paper Products Ltd. Vs. Commissioner of Central Excise ((2001) 247 ITR 128 SC: (1999) 7 SCC 84), while interpreting Section 37B of the Central Excise Act, 1944, which is in pari materia with Section 28A of the TNGST Act, this Court had held that the circulars issued by the Central Board of Excise and Customs are binding on the Department and the Department is precluded from challenging the correctness of the said circulars, even on the ground of the same being inconsistent with the statu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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