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TMI Blog2021 (2) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... d return of income on 16.09.2011 declaring a total income of Rs. 18,83,160/-. This return was accepted under section 143(1) of the Act. Subsequently, the assessment was reopened under section 148 of the Act by issue of a notice dated 30.03.2018. The reasons for issue of notice were that the Assessee sold two shops at Cavalry Road, Bangalore (hereinafter referred to as "the property") under a sale deed dated 10.8.2009 for a sale consideration of Rs. 32,27;010/-. The value adopted by the registering authority for the purpose of stamp duty and registration charges i.e., as per guideline valuation was Rs:57,80,325/-. The Assessee had not disclosed the capital gain on sale of the property, the AO initiated proceedings for reassessment to assess capital gain that escaped assessment. 4. In the reassessment proceedings, the Assessee took a stand that Section 45(1) of the Act clearly lays down that any gain arising on the transfer of the capital asset effected in the previous year shall be chargeable to income tax under the head "capital gain" and shall be deemed to be the income of the previous year in which the transfer took place. Section 2(47) of the Act defines transfer which includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of transfer. The assessee placed reliance on the provisions of section 47 of the Indian Registration Act, 1908, which provides that a registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. The CIT(A) however did not agree with the stand taken by the assessee and he agreed with the view of the AO that section 50C would be applicable in Assessment Year 2011-12 because it is only in Assessment Year 2011-12 that the value for the purpose of stamp duty and registration was fixed by the registering authorities. The CIT(A) also drew support from the decision of the Hon'ble Calcutta High Court in the case of M/s. Bagri Impex Pvt. Ltd., Vs. ACIT (2013) 31 taxmann.com 39 (Calcutta). In that case, full consideration on transfers was received in one year and the registration of the sale deed happened in a subsequent Assessment Year. The application of section 50C of the Act in another Assessment Year, which is neither the year of receipt of sale consideration nor the year of determination of valuation by the registering authority u/s.50C, was upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1908, the sale by the assessee to the transferee would operate from 10.08.2009. Therefore transfer by way of sale of the property took place on 10.8.2009. 9. Under section 45(1) of the Act, the charge on capital gain is in the year of transfer. Section 45(1) of the Act clearly lays down that any gain arising on the transfer of the capital asset effected in the previous year shall be chargeable to income tax under the head "capital gain" and shall be deemed to be the income of the previous year in which the transfer took place. Section 2(47) of the Act defines transfer which includes a sale. The transfer in the present case is "sale" and since sale in the present case has taken place in the previous year relevant to Assessment Year 2010-11, the capital gain in question cannot be brought to tax in Assessment Year 2011-12. This aspect has been accepted by the AO in the order of assessment. Because the assessment for Assessment Year 2010-11 was barred by time and could not be reopened, he resorted to the provisions of Sec.50C of the Act and taxed deemed accrued capital gain. Section 48 of the Act lays down that capital gain has to be computed by reducing from the full value of consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gains". Section 45 is a charging section. For the purpose of imposing the charge, Parliament has enacted detailed provisions in order to compute the profits or gains under that head. No existing principle or provision at variance with them can be applied for determining the chargeable profits and gains. All transactions encompassed by s. 45 must fall under the governance of its computation provisions. A transaction to which those provisions cannot be applied must be regarded as never intended by s. 45 to be the subject of the charge. This inference flows from the general arrangement of the provisions in the Income-tax Act, where under each head of income the charging provision is accompanied by a set of provisions for computing the income subject to that charge. The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section. Otherwise one would be driven to conclude that while a cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was inserted by the Finance Act, 2002 w.e.f 1-4-2003 and was as follows: "Special provision for full value of consideration in certain cases. 50C.(1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority:") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer." The provisions were amended by the Finance Act, 2009 w.e.f 1-10-2009 by adding the word "Assesseable" after the word adopted or assessed. After the amendment with effect from 1st October, 2009 the provision of Section 50C stood as follows: "Special provision for full value of consideration in certain cases. 50C.(1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value for the purpose of income tax shall be the same as the value for stamp duty. By adopting devices to defeat the provision, the assessee cannot be heard to contend that section 50C would not be applicable merely because the Deed of Conveyance had not at that time been executed or registered. The contention that the property stood transferred in the financial year 2005-06 when the sale proceeds were received on the basis of the definition appearing from s.2(47)(v) of the I.T. Act is without any substance for reasons already discussed. The assessee itself did not follow s.2(47)(v) of the I.T. Act because it did not offer the transfer for taxation in the year 1996 when the possession is claimed to have been made over on the basis of the agreements for sale in accordance with s.2(47)(v) quoted above. Designs to evade tax cannot be permitted. The Assessing Officer on the date of assessment for the assessment year 2006-2007 had before him the valuation made by the State for the purpose of stamp duty and rightly applied the same." 12. The aforesaid decision is not applicable to the facts of the present case as there was no device adopted by the Assessee to ensure that provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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