9911796707
TMI Blog1995 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... evance has been raised regarding these two deductions made in the apparent consideration for the purpose of arriving at payment to be made under section 269UF of the Act, one on account of stamp duty, etc., payable by the purchaser as cost of conveyance and, secondly, the discounted value of consideration as on the date of agreement to sell as distinguished from the discounted value of consideration payable as on the date of transfer. Both learned counsel appearing for the parties have stated that the controversy raised before us has been the subject-matter of a decision of this court in the case of Pradip Ramanlal Sheth v. Union of India [1993] 204 ITR 866 in which while it has been held that the expenses to be borne by the purchaser for conveying the property more particularly, the expenditure of purchasing--the stamp duty, etc., cannot be deducted from the apparent consideration stated in the agreement to sell for the purpose of arriving at the discounted value and for determining the consideration payable under section 269UF. However, this court has held that on a plain reading of the provisions of section 269UA(b) defining the term "apparent consideration" the amount stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration for the transfer consists of a thing or things and a sum of money, the aggregate of the price that such thing or things would ordinarily fetch on sale in the open market on the date on which the agreement for transfer is made, and such sum ; (iii) if the immovable property is to be transferred by way of lease,--- (A) in a case where the consideration for the transfer consists of premium only, the amount of premium as specified in the agreement for transfer ; (B) in a case where the consideration for the transfer consists of rent only, the aggregate of the moneys (if any) payable by way of rent and the amounts for the service or things forming part of or constituting the rent, as specified in the agreement for transfer ; (C) in a case where the consideration for the transfer consists of premium and rent, the aggregate of the amount of the premium, the moneys (if any) payable by way of rent and the amounts for the service or things forming part of or constituting the rent, as specified in the agreement for transfer ; and where the whole or any part of the consideration for such transfer is payable on any date or dates falling after the date of such agreement for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... means the doing of anything (whether by way of admitting as a member of or by way of transfer of shares in a co-operative society or company or other association of persons or by way of any agreement or arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, such property." A plain reading of the provision, in our opinion, does not lead to any such conclusion that the view taken by the earlier Division Bench is such which cannot be taken. The aforesaid provision, in our opinion, cannot have reference to the date of transfer under a duly executed sale deed but not registered. The whole scheme of Chapter XX-C has been framed to place the Central Government in a position of a prospective purchaser before the stage of execution of the sale deed is reached. Under section 269UC it is envisaged that no transfer of immovable property exceeding five lakh rupees as may be prescribed shall be effected except after an agreement for transfer is entered into between the person who intends transferring the immovable property and the person to whom it is proposed to be transferred. That is to say, no transfer by execution of a transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e apparent consideration stated in the agreement is significantly understated than the fair market value. It is only for that purpose that the definition reproduced above is applicable. In the context of the payment to be made to the vendor, this definition cannot be made applicable because the same would result in penalising the vendor for no fault of his. Though the contention looks attractive at the first flush we are unable to reach the same conclusion on a reading of the entire scheme of Chapter XX-C. For the purpose of reading down the provision and conforming it to the purpose of determining the fair market value and not to the provisions relating to payment. It is to be noticed that the concept of determining the fair market value and there being significant undervaluation of the apparent consideration, than its fair market value giving rise to the Presumption about the understatement of consideration with attempt to avoid tax is not part of the statute. The two limitations about there being significant undervaluation of the apparent consideration than the fair market value and that understatement is with an intent to avoid tax was inferred to be there by their Lordship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amanlal Sheth's case [1993] 204 ITR 866 is to be accepted, it would result in the provision itself being unconstitutional. This has been stated only to be rejected for the simple reason that the constitutional validity of the pro vision has not been challenged in these petitions and the only question in these petitions is the interpretation of the statute as it exists. As discussed by us, we see no reason to depart from the view taken by this court in Pradip Ramanlal Sheth's case [1993] 204 ITR 866 for the purpose of reconsidering the same. Accordingly, all the petitions succeed in part. S far as apparent consideration for the purpose of making payment to the same is concerned, no discount or deduction can be made from the consideration disclosed in the agreement to sell on account of registration fee, stamp duty, etc. So far as the order directs such deductions, it is concerned, is not in accordance with law and to that extent that part of the impugned order has to be quashed. However, so far as determination of discounted value in terms of the definition of apparent consideration under section 269UA is concerned, by reducing the amount at the prescribed rate of interest, the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
