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TMI Blog2020 (2) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... which is indicator of the fact that the market value of the property was lower than guideline value which aspect is taken note by State Government and amendments were made in guideline value in tune with market price albeit in 2017 while we are presently seized of ay: 2016-17 . Amendments were made by Finance Act,2018 in Section 56(2) where in differential upto 5% was allowed and no additions be made under deeming fiction of Section 56(2) albeit it is applicable from ay: 2019-20 onwards and fifthly no incriminating evidence is brought on record by Revenue which could evidence that assessee in fact paid higher sale consideration than the actual sale consideration recorded in registered sale document albeit we are aware that Section 56(2) is deeming section and Revenue is not obligated to bring on record any incriminating material in such circumstances to prove that actual sale consideration paid by tax-payer is higher than that recorded in sale document , thus keeping in view cumulative effect of our aforesaid reasonings, we delete the additions - Decided in favour of assessee. - ITA No.2129/Chny/2019 - - - Dated:- 10-2-2020 - Shri N.R.S. Ganesan, Judicial Member And Shri Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 to ₹ 2,43,98,050/- . It was submitted that differential between guideline value on the date of sale and the sale consideration was only ₹ 13,03,000/- , which is less than 5%. The assessee also submitted before AO that amendment has taken place by Finance Act, 2018 , wherein there could be a difference up-to 5% between guideline value and the sale consideration which shall not be treated as income under deeming fiction of Section 56(2) of the 1961 Act. The assessee also requested AO to refer the matter to valuation cell to find out the correct value of the property. 1.2 The AO observed that the assessee has claimed that there was subsequently reduction in the guideline value by State Government for stamp duty purposes, but AO was of the view that provisions of the 1961 Act has to be applied and hence guideline value on the date of registration shall prevail . The AO was also of the view that amendment in Section 50C and 56(2) of the 1961 Act were a subsequent event and was not applicable on the date of registration /transfer in the instant case. Further, it was observed that stamp duty authorities revised guideline value subsequently while guideline value on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly from 01.04.2019. 4. We have considered rival contentions and perused material on record. We have observed that assessee is in the business of hiring/ leasing out of heavy duty cranes and other equipment s under proprietary concern namely M/s.Sundaram Movers. The assessee purchased vacant land admeasuring 7 acres 98 cents at Thamal II Village, Kancheepuram Taluk, Kancheepuram District, Tamil Nadu , vide registered sale deed dated 15.07.2015 for a total consideration of ₹ 3,51,12,000/- (vide registered Document No.1164/2015),while guideline value of the property fixed by State Government for stamp duty purposes was ₹ 3,64,15,000/- as on 15.07.2015. The said guideline value was later reduced on 09.06.2017 by State Government itself to ₹ 2,43,98,050/- on 09.06.2017 , as claimed by assessee before both the authorities below and none of the authorities disputed this contention of the assessee and even before us it is not agitated by learned DR. The differential in the guideline value vis- -vis actual sale consideration was only ₹ 13,03,000/- when the sale transaction took place in 2015, which is around 3.711% which is less than 5%. The assessee had object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deal with local property matters have realized that market value of the properties have fallen and guideline value was brought down in tune with realities in real estate declining market values and guideline value of this property was reduced to ₹ 2.44 crores as on 09.06.2017. In the instant case before us, the differential between sale consideration and guideline value is meager 3.711% which is less than 5% when the sale transaction took place in 2015. The Finance Act, 2018 made amendments in Section 50C and 56 of the 1961 Act and extract of budget speech and notes on clauses are reproduced hereunder: Incentive for real estate 149. Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in immovable property, the consideration or circle rate value, whichever is higher, is adopted and the difference is counted as income both in the hands of the purchaser and seller. Sometimes, this variation can occur in respect of different properties in the same area because of a variety of factors including shape of the plot and location. In order to minimize hardship in real estate transaction, I propose to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other sources . This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years. Thus, as could be seen simultaneous amendments were made in the 1961 Act by amending provisions of Section 50C and 56(2) of the 1961 Act by Finance Act, 2018 w.e.f. 01.04.2019 which are applicable from ay: 2019-20 with a view to minimize hardship to buyers and sellers in real estate transactions and where the differential is up to 5% between the guideline value and the actual sale consideration , the said differential shall not be deemed as income under the deeming fiction of Section 50C and 56(2) of the 1961 Act . The aforesaid amendment was made w.e.f. 01.04.2019 and shall be applicable effective from ay: 2019-20 . However we note that this amendment was to minimize hardship faced by buyers and sellers in real estate transaction wherein the law makers have taken note of the hardships faced by buyers and sellers in real estate transactions and suitably amended the law to meet with ground realities . The State Government has also noted the hardships faced by parties in real estate transactions and brought d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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