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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 ..... amendment to section 50C of the Act w.e.f. 01.10.2009. The decision referred to by the learned DR in the case of J.Appa Rao [ 2013 (11) TMI 1775 - ITAT HYDERABAD] is a case where it was held that applicability of the provisions of Sec.50C of the Act is mandatory w.e.f .1-4-2003. This decision does not in any way support the case of the revenue regarding the year in which capital gain is liable to be taxed. Capital gain in question cannot be brought to tax in Assessment Year 2011-12. The Revenue authorities erred in bringing to tax the capital gain in Assessment Year 2011-12. The addition made by the AO is accordingly directed to be deleted - Decided in favour of assessee. - ITA No. 1527/Bang/2019 - - - Dated:- 10-2-2021 - SHRI N. V VASUDEVAN , VICE-PRESIDENT Assessee by : Shri. V. Srinivasan , Advocate Revenue by : Shri. Ganesh R. Ghale , Jr. Standing Counsel ORDER PER SHRI N.V VASUDEVAN , VICE-PRESIDENT : This is an appeal of the assessee against the order dated 24.05.2019 of CIT(A)-6, Bengaluru, relating to Assessment Year 2011-12. At the time of hearing, learned Counsel for the assessee submitted that he does not wish to press for adjudication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Financial Year 2009-10 relevant to the Assessment Year 2010-11, the capital gain in question cannot be brought to tax in Assessment Year 2011-12. 5. The AO however wanted to tax the difference between the value adopted by the registering authorities at ₹ 57,80,325/- and the sale consideration between the parties at a sum of ₹ 32,23,000/- viz., a sum of ₹ 25,53,315/- in Assessment Year 2011-12 on the ground that since the document was ultimately registered on 26.06.2010 Assessment Year 2011-12 will be the year in which the provisions of section 50C of the Act would be attracted and according brought to tax a sum of ₹ 25,53,315/-. The AO held that since higher value was fixed for stamp duty purpose during the AY.2011-12 and as such the deemed capital gains accrued to the assessee for AY: 2011-12. The AO also observed that the Assessee's stand that capital gain on sale of property it is assessable for AY 2010-11, is only for the reason that, it is not possible to re-open the assessment for AY 2010-11 now, as the-same is already barred by limitation of time for re-opening. For the above reasons, the AO brought to tax additional capital gain of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel also distinguished the decision of the Hon ble Calcutta High Court by pointing out that in that case, the assessee offered capital gains for taxation in the year of receipt i.e., 2006-07 but the sale deed had been executed in Assessment Year 2007-08 and registration took place in the year 2008-09. The assessee had offered the capital gain to tax in Assessment Year 2006- 07. The Hon ble Calcutta High Court upheld levy of capital gain in AY 2006-07 by applying provisions of Sec.50C of the Act. He pointed out that the decision has to be read with the peculiar facts and circumstances of that case and not applicable to the present case. He also pointed out that section 50C of the Act was amended w.e.f. 01.10.2009 substituting the word assessed by the word assessable . It was in this context that the Hon ble Kolkata High Court upheld the Revenue s contention. Learned DR for the Revenue reiterated the stand of the Revenue as contained in the order of AO and CIT(A). He also relied on a decision of the ITAT Hyderabad Bench in the case of Sri J.Appa Rao Vs. ACIT ITA No. 518/Hyd/2010 order dated 29.11.2013. 8. I have given a careful consideration to the rival submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed [or assessable] 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. Sec.50C of the Act substitutes the full value of consideration received or accruing on transfer which otherwise would be the value as envisaged u/s.48 of the Act. Sec.50C of the Act is therefore an exception to Sec.48 of the Act in certain circumstances. Section 50C of the Act does not operate to change the year of transfer as laid down in section 45(1) of the Act. 10. Section 45 of the Act is a charging section as far as capital gain on transfer of capital asset is concerned. Section 48 is a machinery or computation provision. A transaction to which those provisions cannot be applied must be regarded as never intended by Section 45 of the Act to be a subject of charge. This inference flows from the general arrangement of the provisions in the Act whereunder each head of income the charging provision is accompanied by a set of provisions for computing the income subject to that charge. Referring to the fundamental integrality of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he computation provision at all if a certain interpretation is pressed on the charging provision. That pertains to the fundamental integrality of the statutory scheme provided for each head. (emphasis supplied) The reverse inference that can be drawn on the basis of the aforesaid observations underlined, is that if there is no charge to tax on capital gain in AY 2011-12 u/s.45(1) of the Act, the computation provision u/s.48 of the Act, cannot operate to create a charge. 11. The decision referred to by the learned Counsel for the Revenue of the Calcutta High Court is on different facts and not applicable to the present case. In the case of Bagri Impex (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-9, Kolkata, (2013) 31 taxmann.com 39 Calcutta, the facts were that the Assessee was owner of 2/5th share in a land situate at Kolkata. The case of the assessee was that the land in question or the interest of the assessee was agreed to be sold on 15th October, 1996 to 15 several buyers. Deeds of conveyance in favour of five buyers were executed on 15.1.1998. The balance 10 deeds of conveyance were executed on 26th May, 2006 and registered on 27th November, 2007. The sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naturally it could not have been registered on that date. The Hon ble Calcutta High Court had to decide the following substantial question of law: viz., Whether, on the facts and circumstances of the case, the learned Tribunal was justified in law in not considering that the words or assessable was introduced in section 50C(1) of the Income Tax Act, 1961 with effect from 1st October, 2009 and thus erred in taking the value of the capital asset as assessed by the Stamp Valuation Authority on 27th November, 2007 instead of actual transfer price for the relevant assessment year 2006-07? The Court held as follows: 7. We have not been impressed by this submission. It is true that 'Transfer' has been defined in Section 2(47) quoted above. But the aforesaid definition was made before Section 50C was introduced to the Income Tax Act. After section 50C was introduced in the year 2003, the value of the land or building or both sold or otherwise transferred has to be the value assessed by the authority of the State Government for the purpose of stamp valuation. The submission that in the financial year 2005-06 when the consideration was received, the Deed of Conveyan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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