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TMI Blog2022 (1) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... n 50D inserted by Finance Act, 2012 with effect from 01.04.2013 would throw some light on the said issue. A machinery provision has been introduced by way of Section 50D of the Act. Though the said provision has come into effect from 1.4.2013, it certainly throws some light on the mode of computation under Section 48 of the Act. In the circumstances, we are of the considered opinion that the guidance value of the land or the guidance value of the building would be appropriate mode to determine the full value of consideration in the case of a transfer where consideration for the transfer of a capital asset is not attributable or determinable. Hence, guidance value adopted by the Tribunal cannot be faulted with. Having regard to the facts and circumstances of the case, the Tribunal having exercised its discretionary power adopted the guidance value of the land as the mode for determination of full value of consideration, the same being not perverse or arbitrary, we are not inclined to interfere with the impugned order - no substantial question of law arises for our consideration. - I.T.A.No.475/2016 - - - Dated:- 1-12-2021 - HON BLE MRS.JUSTICE S. SUJATHA AND HON BLE MR. JU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preferred an appeal before the Tribunal. The Tribunal placing reliance on the decision of its Coordinate Bench in the case of M/s Shankar Vittal Motor Co. Ltd., held that variation of the capital gain should be appropriate to adopt fair market value/asset as deemed consideration, but not the cost of construction, upholding the order of the Commissioner of Income Tax (Appeals). Hence, this appeal by the Revenue. 6. Learned counsel appearing for the Revenue argued that the Tribunal has grossly erred in holding that the guidance value has to be adopted for computing the capital gains when the terms and conditions of the agreement specify the value of consideration. Referring to Section 48 of the Act, it was argued that full value of consideration has to be interpreted with reference to cost of construction. Section 50C was also referred to. It was agued that Section 50D of the Act which has come into effect from 1.4.2013 is not applicable to the facts of the present case. 7. Learned Senior counsel representing the respondent assessee submitted that for the assessment year under consideration, there is no provision in the Act which contemplates as to how full value of consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specified entity referred to in subsection (4) of section 45, the amount chargeable to income-tax as income of such specified entity under that sub-section which is attributable to the capital asset being transferred by the specified entity, calculated in the prescribed manner: Provided . 10. On combined reading of these provisions, any profits or gains arising from the transfer of a capital asset with the exception as saved in Sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G and 54H shall be chargeable to income tax under the head capital gains and by legal fiction it is deemed to be the income of the previous year in which the transfer took place. The mode of computation as prescribed under Section 48 would indicate that the income chargeable under the head capital gains shall be computed by deducting the following amounts from the full value of consideration received or accrued as a result of the transfer of the capital asset. [1] expenditure incurred wholly or exclusively in connection with such transfer [2] cost of acquisition of the asset and the cost of any improvement thereto. Special provision for full value of consideration in certain cases is dealt by Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12B(2) provides that the amount of a capital gain shall be computed after making certain deductions from the full value of the consideration for which the sale, exchange or transfer of the capital asset is made . In case of a sale, the full value of the consideration is the full sale price actually paid. The legislature had to use the words full value of the consideration because it was dealing not merely with sale but with other types of transfer, such as exchange, where the consideration would be other than money. If it is therefore held in the present case that the actual price received by the respondent was at the rate of ₹ 136 per share the full value of the consideration must be taken at the rate of ₹ 136 per share. The view that we have expressed as to the interpretation of the main part of section 12B(2) is borne out by the fact that in the first proviso to section 12B(2) the expression full value of the consideration is used in contradistinction with fair market value of the capital asset and there is an express power granted to the Income-tax Officer to take the fair market value of the capital asset transferred as the full value of the consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt has observed thus: 32. Thirdly, the real question concerning us is the year in which the assessee is required to pay tax. There is no dispute that in the subsequent accounting year, the assessee did make imports and did derive benefits under the advance licence and the duty entitlement pass book and paid tax thereon. Therefore, it is not as if the Revenue has been deprived of any tax. We are told that the rate of tax remained the same in the present assessment year as well as in the subsequent assessment year. Therefore, the dispute raised by the Revenue is entirely academic or at best may have a minor tax effect. There was, therefore, no need for the Revenue to continue with this litigation when it was quite clear that not only was it fruitless (on merits) but also that it may not have added anything much to the public coffers. Similarly, in the case of Commissioner of Income-tax V/s. Bilahari Investment [P.]. Ltd., [(2008) 215 CTR 201 (SC)], the Hon'ble Apex Court has observed thus: 20. As stated above, we are concerned with assessment years 1991-1992 to 1997-1998. In the past, the Department had accepted the completed contract method and because of such acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the full market value of consideration. Even in terms of this provision, cost of construction would not be the appropriate method to arrive at the full market value of consideration. 14. In Seshasayee Steels [P.] Ltd., V/s. Assistant Commissioner of Income Tax, Company Circle VI[2], Chennai [(2020) 115 taxmann.com 5 (SC)] while considering the provision of Section 53 of the TP Act in the context of capital gains under the Income Tax Act, it has been held thus: 11. In order that the provisions of Section 53A of the T.P. Act be attracted, first and foremost, the transferee must, in part performance of the contract, have taken possession of the property or any part thereof. Secondly, the transferee must have performed or be willing to perform his part of the agreement. It is only if these two important conditions, among others, are satisfied that the provisions of Section 53A can be said to be attracted on the facts of a given case. 12. On a reading of the agreement to sell dated 15.05.1998, what is clear is that both the parties are entitled to specific performance. (See Clause 14) 13. Clause 16 is crucial, and the expression used in Clause 16 is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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