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TMI Blog2019 (11) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of reference, we take up facts from the case of Smt.Mahinabanu Nainabanu Sipai (Jadeja) in ITA No.2057/Ahd/2017. 4. Brief facts of the case are that according to the assessee, she is a farmer at Chatral. She has filed her return of income for the Asstt.Year 2012-13 on 21.10.2016 declaring total income at Rs. 2.11.092/-. The land bearing survey no.242 at Chatral, Teh.. Kalol, District Gandhinagar was owned by four co-owners viz. assessee herself, Sipahi Mahinabanu, Sipai Hussainmiya and Sipahi Bhikhameeya. They entered into an agreement for sale of the above land on 1.2.2010. Agreement was registered with office of Sub-registrar on 4.3.2010. The sale consideration in the agreement was fixed at Rs. 24,88,880/-. The above land was converted into a non-agriculture land on 8.4.2011. It was sold vide sale deed dated 19.5.2011. The sale consideration was reflected in the sale deed was Rs. 1,10,00,000/-. In the hands of each assessee, sale consideration was fallen at Rs. 27,30,000/-. By taking this amount as full value of sale consideration, each assessee has computed the long term capital gain, and showed in the return of income. 5. The AO got an information that for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the assessee reiterated his submissions as were raised before the AO. He submitted that proviso appended to section 50C has been held to be applicable with retrospective effect by the ITAT, Ahmedabad Bench in the case of Dharamshibhai Sonani Vs. ACIT, 161 ITD 627 (Ahd). According to this provision, if parties have entered into an agreement, then the date of transfer of such capital asset is to be construed from the date on which such agreement was entered, and the value applicable on that date for the purpose of payment of stamp duty would be taken as full sale consideration. However, during the course of hearing, we have confronted the ld.counsel for the assessee that the agreement for sale executed on 1st Feb., was for an agriculture land. The character of the end-product i.e. the land sought to be sold was changed. It was converted into a nonagriculture land. Hence, the potentiality of this land has enhanced, and therefore, the date on which it is to be construed that the agreement was executed on the date on which the land was converted into a non-agriculture land, because it is altogether a different product. The ld.counsel for the assessee qua this query contended th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account 59[or through such other electronic mode as may be prescribed], on or before the date of the agreement for transfer: .... ...... ...." 9. A perusal of section 48 of the Act would indicate that it provides mode of computation of capital gain. It contemplates income arise under the head "capital gain" shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the following amounts viz. (a) expenditure incurred wholly and exclusively in connection with such transfer, and (b) cost of acquisition of the assets and cost of any improvement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has appended a proviso to section 50C whereby it has been provided that in case some agreement fixing the amount of consideration has been executed, and the date of registration for the transfer of the capital asset are not the same, then the value of the property for the purpose of stamp duty is to be adopted on the date on which this agreement was executed. The ITAT in the case of Dharamshibhia Sonani Vs. ACIT( supra) has held that this proviso is applicable with retrospective effect. We do not hesitate for accepting this proposition. But in the present case, the nature of the land has undergone a change. Had the land not converted into non-agriculture land, then the deed would not have been executed, because the vendees are not farmer, and the Gujarat Land Revenue Code puts an embargo upon the right to purchase an agriculture land. Thus, when the land was converted into non-agriculture land, a different product is being formed and undertaken to sell, and the date on which the land was converted into non-agriculture land, is to be construed as the actual date of agreement to sale of the capital asset. In the present case, that date is 8.4.2011. On this date, the rates for valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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