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TMI Blog2019 (8) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... all verify, whether sale consideration received by assessee received through banking channels in whole or in part, is prior to the date of Sale Deed dated 13/02/2012. In the event it is found that the sale consideration has been received as claimed by assessee by way of account payee cheque, bank draft in part or in whole, on or before the date of Sale Deed dated 13/02/2012, assessee deserves benefit as per law. - decided in favour of assessee for statistical purposes. - ITA No.2511(Bang)/2018, ITA No.2799(Bang)/2018 - - - Dated:- 31-7-2019 - Shri A.K. Garodia, Accountant Member And Smt. Beena Pillai, Judical Member For the Appellant : Shri S.Ramasubramanian, CA For the Revenue : Smt. H.L.Soumya Achar, Addl.CIT ORDER PER BEENA PILLAI, JUDICIAL MEMBER : Present cross appeals has been filed by assessee as well as revenue against order dated 25/07/18 passed by Ld. CIT (A)-7, Bangalore route for assessment year 2012-13 on following grounds of appeal: ITA No.2511(B)/2018 (Assessment year 2012-13) 1. That the order of the ld. CIT(A) is prejudicial to the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the AO may be restored. 5. The appellant craves leave to add, alter, amend and or/delete any of the grounds mentioned above. 2. Brief facts of the case are as under: Assessee filed its return of income on 27/09/12 declaring total income at a loss of ₹ 5,40,20,596/-. The case was selected for scrutiny and notice under section 143 (2) was issued along with notice under section 142 (1) and a questionnaire. In response to statutory notices, representatives of assessee appeared before Ld.AO and filed requisite details as called for. 3. Ld.AO observed that assessee is engaged in the manufacture of power transformers, UPS, switchgear and batteries. He observed that assessee had claimed short term capital loss of ₹ 2,49,81,254/- on sale of agricultural land. It was submitted by assessee that intention was to by agricultural land and get it converted into a factory land for its industrial purpose. Assessee being a company was not allowed to own and agricultural land, purchase was effected through registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minvest, Ld.AR submitted that there can be no disallowance made under section 14 A in absence of any exempt income. 8. Ld.Sr.DR though supported view adopted by Ld.AO, however could not controvert the fact that assessee had not earned any exempt income during the year under consideration. 9. We have perused submissions advanced by both sides in the light of the records placed before us. Admittedly, there is a categorical finding by Ld.CIT(A) that assessee has not earned any exempt income during the year and therefore we concur with view adopted by Ld.CIT (A) that no disallowance could be made in such circumstances. We draw our support from the decision of Hon ble Delhi High Court in case of Cheminvest Ltd reported in 378 ITR 33. Respectfully following the same we dismiss the grounds raised by revenue. In the result appeal filed by revenue stands dismissed. 10. ITA No. 2511/Bang/2018 (Assessee s appeal) Only issue that arises in this appeal is in respect of the addition made by Ld. AO by invoking section 50 C of the Act. It has been submitted by Ld.AR that assessee has not received any thing ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee could not substantiate by any evidence regarding actual sale consideration received by assessee. From the order passed by Ld.CIT(A), it is observed that, assessee do not object that value of land at the time of registration increased due to conversion. However, revenue does not have any evidences to establish that assessee received any thing over and above value agreed upon between parties as per continuation of agreement to sell dated 21/02/11 which was executed on 17/11/11 (placed at page 73-78 of paper book). 12. On perusal of continuation of agreement, it is observed that price agreed to be received was sum of ₹ 4,80,00,000/- towards part sale consideration out of ₹ 5,78,37,500/-. Referring to Claus 5 at page 76 it is observed that assessee demanded balance amount of ₹ 1,16,75,000/-, whereas purchasers paid sum of ₹ 94,37,500/- after deducting expenditure of ₹ 4,00,000/- incurred by them on behalf of assessee towards Phodi and other miscellaneous activities. Thus, total consideration received by assessee towards sale of land was ₹ 5,74,37,500/-. For sake of convenience, relevant clause wherein bifurcations of total sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ₹ 9,37,500/- bearing cheque No.477564 dated 18.11.2011 favouring M/s Universal Power Transformers Pvt.Ltd. b. ₹ 25,00,000/- (Rs. Twenty five lakhs only) paid by means of post dated cheque dated 477565 dated 16.02.2012 drawn on Canara Bank, Mahalakshmi Branch, Bangalore, favouring M/s Universal Power Transformers Pvt.Ltd., Now we refer to Sale Deed registered on 13/02/12, wherein stamp value ascertained by Registrar of Stamps was ₹ 7,99,095/- and market value of scheduled property has been determined as on registration date was approximately ₹ 7,89,00,000/-. 13. Before us, revenue alleges that as value of land ascertained by Stamp authorities as on date of registration was higher than value in Agreement to sell, and therefore deeming fiction in section 50 C is to be invoked. Assessee alleges that, it has not received any thing over and above what has been mentioned in Agreement to sell and what assessee sold to purchasers was agricultural land and as on date of registration the value of the subject land had it to be agricultural in nature would be less than what has been received by assessee. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of document, which was subsequently carried out on 13/02/12. From aforestated facts, it is observed that conveyance is executed by way of registered sale deed in favour of buyers after conversion of land to industrial use, which was as per mandate of law applicable under Karnataka Stamp Duty Act. It is also fact that agreement to transfer subject lands and date of registration are not same, though both are registered documents. It is observed that Income tax Act w.e.f. assessment year 2017-18 has been amended, wherein stamp duty value may be taken as on date of agreement for transfer and not as on the date of registration of conveyance deed, provided where, amount of consideration has been received by way of account payee cheque/draft or by use of electronic clearance through bank on or before the date of registration of conveyance deed and provided a part of or entire sale proceeds is received prior to the date of agreement. 14. We have also referred to Memorandum, explaining provisions of Finance Bill 2016, wherein this amendment has been brought into statute and has observed as under: Rationalization of section 50C in case sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esult which could never have been intended by the legislature. Hon ble Delhi High Court in case of Ansall Landmark Township (P) Ltd., reported in 234 taxman 825 , wherein Hon ble Court in respect of 2nd proviso to section 40 (a) (ia) held as under: Now that the legislature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such n amendments in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced. In view of these discussions, as also for the detailed reasons set out earlier, we cannot subscribe to the view that it could have been an intended consequence to punish the assesses for non-deduction of tax at source by declining the deduction in respect of related payments, even when the corresponding income is duly brought to tax. That will be going much beyond the obvious intention of the section. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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