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TMI Blog2023 (2) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... e statute namely to curb the menace of unaccounted cash being infused in the real estate transaction. The principle which was culled out by the Hyderabad tribunal is a correct interpretation of the provisions of the Section 50C in the case of the compulsory acquisition of land. Thus, the findings rendered by the CIT(A) as affirmed by the tribunal on this issue does not call for any interference. Disallowance on account of claim of shortage of coal - AO noticed shortage of coal was abnormally high in view of the facts in the preceding assessment year where there was a surplus of 18,450.24 metric tons of coal - CIT(A) refused to accept the conclusion arrived at by the assessing officer and allowed the assessee s appeal and deleted the disallowance on the shortage of coal - HELD THAT:- As mentioned about the quantity and value as was shown and from the notes and financial statements for the year ended 31.03.2015, we find that the quantity of 27,426.39 metric tons was subtracted from the total quantity of 10,52,299.00 metric tons which would show that the actual consumption of coal was 10,24,872.61/- metric tons. The total value of the coal as at 31.03.2015 was Rs. 41,278.13/-. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y provision is plain and unambiguous, it is not permissible for the Court to add a substract words to or from a statute or read something into it which is not there. The Court cannot rewrite or recast a legislation in [Kotak Mahindra Bank Limited [ 2022 (6) TMI 13 - SUPREME COURT ] and Md. Shahabuddin Versus State of Bihar Others [ 2010 (3) TMI 991 - SUPREME COURT ] It is also well settled that the Court has to make an effort to give effect to each and every word used by the legislature and it is to be presumed that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the provision should have effect. While interpreting a provision the Court should keep in mind that the legislature did not intend to use superfluous word(s) or expressions in a statutory provision. Nathi Devi Versus Radha Devi Gupta [ 2004 (12) TMI 668 - SUPREME COURT ] Therefore, keeping in mind the aforesaid canons of interpretation and the object behind inserting the said provision it appears to this Court that the legislature used the words and expressions in Section 50C of the Act consciously to give the same a restricted meaning - the term tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranmay Bhattacharyya, J.) 1. This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 is directed against the order dated 09.02.2022 passed by the Income Tax Appellate Tribunal C Bench Kolkata (tribunal) in ITA Nos. 87/Kol/2019 for the assessment year 2015-2016. The revenue has raised the following substantial questions of law for consideration:- (i) Whether the Learned Tribunal erred in law in holding that Section 50C of the said Act cannot be invoked in the case of the respondent since the transfer of land was made to the NHAI. (ii) Whether the decision of the Learned Hyderabad SMC Bench of the Tribunal arrived at in ITA Nos. 1680/Hyd/2018 1681/Hyd/2018 is applicable to the instant case. (iii) Whether the Learned Tribunal erred in law in upholding the decision of the Commissioner of Income Tax (Appeals) with regard to the claim of shortage of coal without appreciating the materials on record and without giving its findings on the issue. (iv) Whether the Learned Tribunal is justified in allowing the claim of shortage of coal when the respondent in its reply dated 16.12.2017 has stated that there was surplus of coal as shown i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 50C of the Act by relying upon an order passed by Hyderabad tribunal in ITA No. 1680, 1681/Hyd/2018 dated 22.07.2020 without noting that the said decision cannot be applied to the facts of the case as in the said case the assessee had not transferred therein own property consisting of land and building but had only transferred their right to receive the amount of compensation. Mr. Kundalia placed reliance on the judgment of the Hon ble Division Bench of the High Court of Madras in Ambattur Clothing Company Limited Versus Assistant Commissioner of Income Tax 2010 326 ITR 245 (Mad), for the proposition that the assessing officer was justified in treating value adopted by the stamp valuation authority as deemed sale consideration received as a result of the acquisition. Further it is submitted that while passing the impugned order on the issue of shortage of coal, the learned tribunal had merely reproduced the findings of the CIT(A) and did not examine the matter in an independent manner. Thus, according to the learned senior standing counsel, the tribunal failed to properly exercise his powers and mechanically dismissed the appeal filed by the assessee. 5. The learned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 wherein the said quantity of 27,426.39 metric tons has been mentioned and the figures clearly shows that the closing stock as per books as on 31.03.2015 was 115,602.77 metric tons. The closing stock as on 31.03.2015 upon physical verification and actually available was 143,029.16 metric tons and the difference being 27,426.39 metric tons and this was duly subtracted as could be seen from the notes on the financial statement for the year ended 31.03.2015. It is submitted that the assessing officer did not properly appreciate the quantity of coal as could be seen from all the statements and this was explained before the CIT(A) who has considered the factual matter and granted relief in favour of the assessee and this order was affirmed by the learned tribunal. The learned advocate placed reliance on the decision of the High Court of Rajasthan in Gopa Ram Versus Union of India and Others in Civil Writ Petition No. 12746 of 2017 dated 22.01.2018 for the proposition that Section 24 of the Acquisition Act, 2013 has no application in the acquisition proceedings under National Highways Act, 1956. 6. The first aspect we will deal with is whether the assessing officer was justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the assessee before the tribunal was dismissed. Challenging the said order, the assessee filed appeal before the High Court. The explanation offered by the assessee before the assessing officer in respect of deemed value of the properties was that while registering, the sub registrar refused to release the document except on payment of higher stamp duty on enhanced valuation and since the buyers wanted the title documents to be released at the earliest they had chosen to pay the stamp duty without contesting the same and without consulting the assessee and that the assessee as the vendor did not have any locus standi in the proceedings and hence the assessee should not be made to suffer by enhancing the assessment. The said explanation offered by the assessee was rejected on the premise that Section 50C of the Act makes it obligatory on the part of the assessing officer to treat the value adopted by the stamp valuation authority as deemed sale consideration received/accrued as a result of transfer. The facts of the case are entirely different and it was not a case of any compulsory acquisition of land as in the case on the hand. Thus, what is to be borne in mind is that in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officer was of the view that the shortage of coal was abnormally high in view of the facts in the preceding assessment year namely the assessment year 2014-2015 there was a surplus of 18,450.24 metric tons of coal. Thus, the assessing officer declined to accept the explanation of the assessee largely on the ground that there was no shortage of coal in the preceding assessment year A.Y. 2014. The explanation which was offered by the assessee before the CIT(A) is entirely factual and was considered by the CIT(A) and accepted. According to the assessee, the shortage of 27.426.39/- metric tons of coal was actually a surplus and not a shortage. The assessee referred to the annual accounts for the financial year 2014-2015 and copy of the 597th Meeting of the Board of Directors of the appellant company held on 18.08.2015. The CIT(A) after taking note of the explanation offered by the assessee held that there are various circumstances in which a shortage may occur and the assessing officer failed to examine the reason as to why loss has occurred, was there a shortage of funds as a result of which coal could not be purchased or was there any mishap due to which coal could not reach the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to Rs. 0.31 lakhs and Rs. 16.37 lakhs respectively be adjusted in the Books of Accounts, as the case may be for the year 2014-2015. 10. The above resolution is an explanation offered by the assessee which ought to have accepted by the assessing officer. Therefore, we are of the view that the issue relating to the alleged shortage of coal being entirely factual had been rightly explained. 11. Coming back to the taxability of the compensation received by the assessee for the lands compulsory acquired under the 2013 Act, it is relevant to take note of the circular issued by the CBDT dated 25.10.2016 in Circular No. 36/2016. It was pointed out that under the existing provisions of the Income Tax Act an agricultural land which is not situated in specified urban area is not regarded as a capital asset and hence capital gain arising from the transfer (including compulsory acquisition) of such agricultural land is not taxable. It is further stated that Finance (No. 02) Act, 2004 inserted Section 10(37) in the Act from 01.04.2005 to provide specific exemption to capital gains arising to an individual or a HUF from compulsory acquisition of an agricultural land situated in sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lord. However, I wish to pen a few words in support of the conclusion arrived at by My Lord in respect of the 1st substantial question of law suggested by the Revenue by approaching the said issue from a different angle. 2. Section 50C was inserted by the Finance Act 2002 with effect from 01.04.2003 for the purpose of taking the value adopted or assessed by the stamp valuation authority as the deemed full value of consideration received or accruing as the result of transfer of a capital asset being land or building or both, in case the consideration received or accruing as a result of transfer is less than such value. 3. For the purpose of deciding as to whether Section 50C is applicable in case of compulsory acquisition of capital asset, it would be relevant to take note of the provisions of Section 50C(1) which runs as follows (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 [or assessable] by any authority of a State Government (hereafter in this section referred to as the stamp valuation authority ) for the purpose of payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the legislature used the words and expressions in Section 50C of the Act consciously to give the same a restricted meaning. In view thereof I am of the considered view that the term transfer used in Section 50C has to be given a restricted meaning and the same do not have a wider connotation so as to include all kinds of transfer as contemplated under Section 2(47) of the Act. This Court accordingly holds that the provisions of Section 50C shall be applicable in cases where transfer of the capital asset has to be effected only upon payment of stamp duty. 7. Now the question arises whether in cases of compulsory acquisition of a capital asset being land or building or both, the provisions of Section 50C will be applicable. 8. In case of a transfer by way of compulsory acquisition, the capital asset being land or building or both vests upon the government by operation of the provisions of the relevant statute governing such acquisition proceeding and subject to the terms and conditions laid down in the said statute being followed. In case of compulsory acquisition the transfer of property takes place by operation of law and the provisions of the Transfer of Property Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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