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TMI Blog2022 (10) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income as sale of rights in land has been transferred. The dispute between the Revenue and the assessee is only with regard to two issues (1) what is transferred is sale of land according to Revenue but what is transferred is sale of rights in land according to assessee (2) Revenue substituting stamp duty value in terms of Section 50C of the Act treating it as sale of land as against the actual consideration received in the sum of Rs.24.03 lakhs towards sale of rights in land. Both these issues have already been duly addressed by us hereinabove and hence, we direct the ld. AO to delete the full value of consideration substituted by him by adopting stamp duty value in terms of Section 50C of the Act and accept the sale consideration reported by the assessee herein. Since we have already deleted the addition made u/s.50C of the Act on the ground that the amended provisions of Section 50C of the Act could not be made applicable for transfers made prior to 01/10/2009, the adjudication of other grounds raised by the assessee with regard to reference to Departmental Valuation Officer (DVO), becomes infructuous and academic in nature. Hence, they are not adjudicated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest income and dividend income. In the first round of proceedings this Tribunal vide its order dated 19/10/2016 had held that Section 50C of the Act is not applicable as the agreement to sell rights in land was unregistered and accordingly, decided one ground of appeal. The revenue carried the matter before the Hon ble Jurisdictional High Court. The Hon ble High Court in Income Tax Appeal No.1466 of 2017 dated 23/11/2021 quashed the Tribunal order and remanded the appeal back to the Tribunal for denovo consideration of all the four grounds. 3.1. On 28/07/2007, the assessee vide unregistered agreement sold his right to acquire / own 5000 sq.yards of land situated at Chheda Nagar, Ghatkopar for a consideration of Rs.23,53,000/-on as is where is basis to M/s. Chheda Reality Pvt. Ltd., The said land is part of large parcel of land of 140 acres. In the return, the assessee offered long term capital loss of Rs.4,47,826/-. The following list of dates and events would explain the flow of title to the property and the related litigation thereon:- 3.2. The assessee submitted that from perusal of para 2(i) to 2(iii) of the agreement, it is clear that as per the Revenue records a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 24,03,000/- 3.4. It was submitted that the word assessable inserted in Section 50C of the Act is only prospective in application and hence, cannot be used for the transactions carried out prior to that date. The ld. CIT(A) did not heed to these contentions of the assessee and upheld the action of the ld. AO. However, with regard to applicability of amended provisions of Section 50C of the Act w.e.f. 01/10/2009, the ld. CIT(A) held that the said amendment would only be prospective in application, but the said provision is nonetheless would be applicable to the facts of the assessee case herein in view of the fact that the execution of the documents which would have effect of transferring the properties to the assignees was not executed before 01/10/2009. 3.5. We find that the ld. CIT(A) had placed heavy reliance on the sub-clause 6 of clause xxiii on page 12 of the agreement which mentions as under:- It is agreed that in the event of the aforesaid litigations and/or any one or more of them remain pending for a period of 25 (Twenty Five) months from the date hereof then in such event the Assignees shall pay to the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transaction need to be seen than its form. Hence, we have no hesitation to conclude that assessee had transferred only the right in the land subject to pending litigations in favour of the assignee prior to 01/10/2009. 3.8. The provisions of Section 50C of the Act were amended w.e.f. 01/10/2009 including the word assessable thereon. This was introduced in the statute to plug the loophole that assessees were conveniently entering into unregistered agreements, receiving consideration, handing over the possession and not presenting the said agreement for registration before the stamp duty authorities in order to get out of the rigours of provisions of Section 50C of the Act and payment of stamp duty by the buyer. However, this amendment w.e.f. 01/10/2009 has been held to be prospective in operation by CBDT Circular No.5 of 2010 dated 03/06/2010 which is Explanatory Notes to Provisions of Finance(No. 2) Act, 2009. The relevant operative portion of the said Circular is reproduced hereunder:- 23. Provisions for deemed valuation in certain cases of transfer. 23.1 The existing provisions of section 50C provide that where the consideration received or accruing as a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admittedly the transfer of rights in land had happened pursuant to an unregistered agreement. Prior to 01/10/2009, we hold that provisions of section 50C of the Act cannot be applied for unregistered documents. Hence, there cannot be any substitution of stamp duty value as the full value consideration in terms of Section 50C of the Act in the instant case. This fact is also strengthened by the fact that assessee has also offered capital gains in the return of income as sale of rights in land has been transferred. As stated supra, the dispute between the Revenue and the assessee is only with regard to two issues (1) what is transferred is sale of land according to Revenue but what is transferred is sale of rights in land according to assessee (2) Revenue substituting stamp duty value in terms of Section 50C of the Act treating it as sale of land as against the actual consideration received in the sum of Rs.24.03 lakhs towards sale of rights in land. Both these issues have already been duly addressed by us hereinabove and hence, we direct the ld. AO to delete the full value of consideration substituted by him by adopting stamp duty value in terms of Section 50C of the Act and accep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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