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TMI Blog2014 (3) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... are liable to bear expenses of stamp duty and it was not within the domain of the assessee and therefore assessee cannot be put to a jeopardy of invoking of section 50C of the Act merely because of the fault of the buyers of the properties. The CIT(A) erred in affirming the invoking of section 50C of the Act in relation to the two properties sold by the assessee through Public auction. Accordingly, we set-aside the order of the CIT(A) and direct the Assessing Officer to allow appropriate relief to the assessee as per law. Enhanced compensation paid to the owner of land as a part of cost of acquisition for the purposes of computation of capital gains - Held that:- The claim of the assessee in question has a bearing on the ultimate determination of tax liability. Admittedly, an appellate authority has wide powers to admit a fresh claim which was not before the Assessing Officer. The legal position in this regard is quite well-settled and we may refer to the judgements of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. Cit [1996 (12) TMI 7 - SUPREME Court] and Jute Corporation of India Ltd. vs. CIT (1990 (9) TMI 6 - SUPREME Court) in this regard. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was found to have sold two properties through public auction. In relation to property bearing Survey No.231 admeasuring 1H 34R, it was sold for ₹ 91,00,000/- whereas another property bearing Survey No.477/2 477/3 was sold for a consideration of ₹ 15,51,000/-. Both the properties were sold in public auction after obtaining the necessary permissions from the State Government of Maharashtra. In terms of the conditions of auction, the purchaser of the properties was liable to bear all the expenses of registration fee, stamp duty and other miscellaneous expenditures. The assessee duly executed the sale-deeds and assessee computed the capital gain accruing on the sale of aforesaid properties by considering the full value of consideration equivalent to the actual sale consideration received amounting to ₹ 91,00,000/- and 15,51,000/- respectively. As per the stand of the Revenue, the said full value of consideration was liable to be substituted for the value adopted by the authority of the State Government for t3h e purposes of payment of stamp duty in terms of section 50C of the Act. The Revenue has sought to justify its stand on the basis that the value adopted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued by an Appropriate Authority under provisions of Income Tax Act, or if a property is sold or allotted by Government or Semi-Government body or a Govt. undertaking or a Local Authority on the basis of predetermined price, then value stated in such certificate issued by an Appropriate Authority or determined by the bodies referred to above shall be true market value of the subject matter property. 6. On the aforesaid basis, it is sought to be canvassed that the lower authorities have erred in invoking section 50C of the Act in order to consider the value adopted by the Stamp Valuation Authority as the full value of consideration. Pertinently, it has also been explained that the buyers of the properties have paid stamp duty at the values determined by the Stamp Valuation Authority which is obviously wrong in view of the instructions of the Government of Maharashtra referred above. The learned counsel pointed out that as per the terms and conditions of the public auction, the buyer of the property was responsible to bear the expenses of registration fee, stamp duty and other miscellaneous expenditures and therefore since it did not involve any outflow from the assessee, the ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 and is inter-alia, engaged in the activity of marketing of agricultural produce as a public utility. The moot question is as to whether the aforesaid proposition of the assessee is in accordance with law or not. 9. As noted earlier, the objective of section 50C of the Act is to substitute the value adopted by a Stamp Valuation Authority as the full value of consideration in cases where the actual consideration received or accruing to an assessee is lower than the value assessed by Stamp Valuation Authority. In other words, in such situations, the value determined by the Stamp Valuation Authority is to be taken as the full value of consideration in order to compute the capital gains. In this context, assessee has referred to the provisions of rule 4(6) of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, especially the proviso which we have reproduced in the earlier part of this order. In terms of the said proviso, the Government of Maharashtra has issued a Circular dated 30.06.2005 (supra) dealing with the cases where sale is conducted by Debt Recovery Tribunal and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stamp duty. This would mean that the consideration stated in the sale-deed is to be accepted as the fair market value for the purposes of payment of stamp duty in the present case and not the prices worked out as per the ready recknoer. Ostensibly, in such a situation the invoking section 50C of the Act for the purposes of substituting the full value of consideration in order to compute the capital gain would fail since there would not be any differential between the stated consideration and the Value to be considered by the stamp valuation authority of the state government for the payment of stamp duty. However, it has been pointed out by the Revenue that the buyers of the properties have paid stamp duty at the value determined on the basis of rates prescribed in the ready reckenor, which are higher than stated consideration. In our considered opinion, the aforesaid factum would not make any difference to the rationale of invoking section 50C of the Act, which has to be decided on the basis of the prevailing legal position, and not on the basis of the position taken by a party. Pertinently, the purchaser of the properties are liable to bear expenses of stamp duty and it was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings and that therefore the CIT(A) erred in admitting such a claim. 16. In our considered opinion, it cannot be doubted that the claim of the assessee in question has a bearing on the ultimate determination of tax liability. Admittedly, an appellate authority has wide powers to admit a fresh claim which was not before the Assessing Officer. The legal position in this regard is quite well-settled and we may refer to the judgements of the Hon ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. Cit, 229 ITR 383 and Jute Corporation of India Ltd. vs. CIT, 187 ITR 688 (SC) in this regard. In the present case, the additional ground entertained by the CIT(A) involved a point of law and it related to assessability of capital gain, which was subject-matter of consideration before him. It is also evident that the claim was based on an order of a judicial body, namely, District Judge, Jalgaon rendered with reference to section 18 of the Land Acquisition of Act, 1894. The claim of the assessee is arising from operation of law and therefore, in our view, the CIT(A) made no mistake in admitting such a claim for the purposes of computing assessee s correct t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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