9911796707
TMI Blog2020 (12) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer. The assesee-company by virtue of two agreements dated 25.12.2011 with the builder was allotted two flats bearing no. 1101 and 1201 in Orange County Project at Ghaziabad. The possession of the said flats was to be handed over by the builder to the assessee-company in the month of April/May, 2012. Just before the date of handover over the possession, the assessee-company transferred the right to purchase the said two flats to Mr. Deepak Jain and Nr, Deepak Mahajan by means of self-made affifavits. During the course of assessment proceedings, the assessee-company failed to furnish any agreement for the said transfer. The only document produced by the assessee in this regard was self-made affidavits, wherein the consideration for transfer of flats was not mentioned. The assessee-company, therefore, was required by the Assessing Officer to show-cause as to why the capital gain arising from the said transfer of flats should not be computed by invoking the provisions of section 50D of the Act. In this regard, it was explained on behalf of the assessee-company that even though only terms and conditions of transfer were mentioned in the affidavits without any considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 50D with its intended purpose of insertion vide the Finance Bill, 2012. A bare reading of the section 50D, as inserted with effect from the lS1 day of April, 2013, is as follows- "50D. Fair market value deemed to be full value of consideration in certain cases.-Where the consideration received or accruing as a result of the transfer of a capital asset by an assessee is not ascertainable or cannot be determined, then, for the purpose of computing income chargeable to tax as capital gains, the fair market value of the said asset -on the date-of transfer shall be deemed to be the full value of the consideration received or accruing as a result of such transfer.". As per the Finance Bill of 2012, relating to direct taxes seeking to amend the Income-tax Act, the following insertion was proposed (pertaining to section 50D); Extract from the Memorandum explaining the provision (s_ 50D) in the Finance Bill, 2012: "FAIR MARKET VALUE TO BE FULL VALUE OF CONSlDERATION IN CERTAIN CASES Capital gains are calculated on transfer of a capital asset, as sale consideration minus cost of acquisition. In some recent rulings, it has been held that where the consideration i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hajan, resident of B-22, Sita Shree Aptt., sectgor-14, Rohini, Deli-110085 Rs. 48,59,000/- (by virtue of affidavit dt. 20.05.12 of Deepak Mahajan and transfer affidavit to builders on 20.05.12. It is further submitted that the assessee received total consideration amount of Rs. 1,01,44,185/- (Rs. 52,85,185/- + Rs. 48,59,000/-j against transfer rights and claimed short term capital gains to the tune of Rs. 2,65, 942/- after deducting the amount ojR-;98, 78,243/- (Rs.S7,20,789/- + Rs. 41,S8,374/- paid for booking of flats (Extract of I. T Return for the relevant year herewith and marked as Annexure: 'B'). It is important to emphasize at this juncture that the Ld. AO. has made a self-contradictory observation in his order wherein on Page - 2 he mentions: "During the course of hearing, the AR. of the assessee company produced the books of accounts along with other requisite details which have also been perused and verified on test check basis. He also furnished other details/ document' which have also been perused and examined. In the course of assessment proceedings, it was noticed that the assessee company had applied for allotment of two flats to the Developer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of s. 50C is concerned, it is humbly stated that numerous judgments have clarified the position of law so far as the transfer of rights in a flat is concerned. The ITAT 'B' Bench of Ahmedabad Tribunal in ITA No.2519/Ahd/2009 order dated 13.04.2012 in the case of Income Tax Officer vs. Silri Yasin Moosa Godil, -under similar facts and circumstances at para-16 held as follows: - "16. From the readrng of Sec. Soc, It IS evident that Sec. 50C is a deeming provision and It extends to only to land or building or both. Section 50C can come into play only m a situation where the consideration received or accruing as a result of the transfer by an appellant of a capital asset, being land or both IS less than the value adopted or assessed or assessable by any authority of state Government therefore for the purpose of payment of stamp duty in respect of such transfer It is settled leg 1 proposition that deeming provision can be applied only in respect of the situation specifically given and hence cannot go beyond the explicit mandate of the section. Clearly therefore, it is essential that for application of Sec. 50C that the transfer must be of a capital asset, being land or bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder in the matter I agree with the view as taken by the AO in the matter. Keeping in view of the facts as mentioned above, in the absence of any cogent material evidence, I do not find any infirmity in the order of the assessing officer and the same is hereby upheld. Ln view of the above, this ground of appal is dismissed". 6. The ld. Counsel for the assessee mainly reiterated before us the submissions made on behalf of the assessee before the ld. CIT(Appeals) on this issue. He submitted that even though the consideration for transfer of two flats in question was not specifically mentioned in the affidavits filed by the asseesee-company, the copies of account of the transferees were furnished by the assessee-company before the Assessing Officer during the course of assessment proceedings showing the agreed sale consideraetion for flat no. 1101 and 1201 at Rs. 49,59,000/- and Rs. 52,85,185/- respectively. He also submitted that the sale consideration so agreed between the assesese-company and the transferees for transfer of the said two flats was taken into consideration by the assesese-company for computing the capital gain and the capital gain so computed at Rs. 2,65,942/- was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration as claimed to be mutually agreed by the asseeese-company to arrive at the conclusion that the consideration received or accruing as a result of the transfer of the two flats was not ascertainable or could not be determined without even making any inquiry whatsoever with the concerned transferees. Keeping in view all these facts and circumstances of the case, we are of the view that the provisions of section 50D are not applicable in this case and the impugned addition made by the Assessing Officer and confirmed by the ld. CIT(Appeals) by invoking the said provision is not sustainable. We accordingly delete the same and allow Ground No. 1 of the appeal. 9. As regards the issue raised in Ground No. 2 regarding the disallowance of Rs. 80,717/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) under section 14A of the Act, the limited relief that is sought by the ld. Counsel for the assessee is that the amount of disallowance so made cannot be added while computing the book profit of the assessee-company under section 115JB of the Act. Since this issue is squarely covered by the various judicial pronouncements including the decision of Special Bench of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
