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TMI Blog2023 (4) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of sale deed - As per the first and second proviso to section 50C(1) the Stamp Duty valuation on the date of agreement if the amount of consideration or part thereto has been received by way of account payee cheques or other electronics mode may be adopted as full value consideration - once the assessee has disputed the adoption of deemed full value of consideration the the AO is bound to refer the determination of the fair market value of the capital asset to the DVO. The issue of determination of fair market value of the land in question is set aside to the record of the AO for fresh adjudication after consideration the objections of the assessee as well as the determination of fair market value by referring to the DVO. Legal expenses claimed as cost of purchase - AO recorded the fact that there was some legal dispute with the respect to the purchase of property and purchase deed was registered on the order of the Court. Accordingly, the AO estimated the expenses at Rs.50,000/- - HELD THAT:- It is manifest from the record that except making a claim of Rs.3 lac as legal expenses regarding the purchase of the property the assessee has not furnished any details of such ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of AO in considering the stamp duty guideline value as on actual registration of sale deed. He failed to appreciate and ought to have held that there were payment through account payee cheque made at the time of executing sale agreement and therefore the value on such date should be considered For Section 50C of the Act. The Appellant prays that the stamp duty value as on date of agreement be considered as Sale consideration. Ground-IV: Legal Expenses On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the action of AO in not allowing Legal Expenses in Full incurred on the registration on Purchase of such property. The Appellant prays that the said deduction be directed to be allowed 3. Ground No.1 2 are regarding transfer of capital asset being land during the year under consideration or in the preceding year. 4. We have heard the Ld. DR and carefully perused the impugned orders of the authorities below. The assessee has sold the land in question vide sale deed registered on 22.02.2010. The assessee claimed before the AO that the lands were transferred in the financial year 2008-09, as the parties sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, District Indore. According to the notice it is mentioned that the same was Registered on 22.02.2010 having market value Rs. 1,32,16,000. However the legal heirs have contented that Assessee had neither sold the said Ancestral agricultural land was sold by the Deceased assessee Late Shri Bhuwan Balai, in the year 2008, ie, on 18.06.2008 and sale Deed was presented for adjudication and registeration on 18.06.2008.The sale was completed and full consideration received in June 2008 in respect of the said land by the deceased assessee. Complete consideration of Rs. 32 lakhs was received by the assessee which is verified by copy of bank statement submitted with cheques deposited in the bank being cheque number 492651 and 492652 of Bank of Rajasthan of Rs.15 lakhs each and Rs. 2 lakhs in Cash being Rs. 32 lakhs in Total. Possession and complete control handed over to the Buyer on 18.06.2008. The stamps to register the Sale Deed were purchased on 16th June 2008 and Documents for registration were submitted to the office of Deputy Registrar, Indore duly signed by both the parties. Sale Deed signed on all pages through thumb impression by the Seller Late Shri Bhuwan Balai and signed by Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is clear from the copy of Sale Deed that Both the parties had signed the deed on 18.06.2008 in front of witnesses And the Execution of Sale Deed was completed. The Sale was complete on 18.06.2008 with the purchaser taking the Possession of the immovable property. The assessee late Shri Bhuwan Balai had presented the Executed Sale Deed for Registration on 18.06.2008 duly signed by him and signed by the Purchaser and witnesses. The Sale deed could not be completely registered at sub registrar's office because the Purchaser was not present. The Purchaser presented himself before the sub registrar for signing in his presence and paid the required Additional Stamp duty on 22.02.2010 for financial year 2009-10 for the Sale deed executed on 18.06.2008. The Complete consideration of Rs. 32,00,000 was received by seller and possession as taken over by the Purchaser in June 2008 and hence the contract was completed the year 2008. As the Deed was signed by both parties on 18.06.2008 the deed is red to be executed in Financial year 2009-10 relevant to assessment year 2009-10. Transfer, in relation to a capital asset, includes, (v) any transaction involving the allowing of the possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer is said to be complete as per the provisions of section 2(47) as submitted earlier. We once again submit that the sale deed fully signed by both the seller and buyer was presented before sub registrar on 18.06.2008 and stamp duty applicable on the date was paid. As far as late assessee was concerned, after he had presented and signed on the sale deed before the office of Sub Registrar the sale of property was complete and all the required legal formalities to be done from his side on ie. date. The assessee had extinguished all his right from the properly and handed over the possession to transferee. It was left on the part of transferee to obtain the documents from the register office. However, for reasons not known to the legal heirs of the late assessee, Buyer paid additional stereo duty as applicable on 22/02/2010 and completed the registration of sale deed. With the facts already submitted by us we submit that the said property was transferred on 18/06/2008 for the purpose of defining Transfer for determining Capital Gains under the Income Tax Act 1961. Therefore the assessment year for charging capital gains should be assessment year 2009-10 and not assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culation of Capital Gain. Le. the year in which sale was made and not the year in which sale deed was executed. In case of Shri Manoj Yadav vs ITO 3(1) Indore, and Smt Rukamani Yadav vs TO 3(1) Indore, ITAT Indore, has held that the assessee has been successful to demonstrate that there was a valid transfer of the impugned capital asset as per the provision of section 2(47) of the Act on the date 24.03.2007 when the assessee received total sale consideration through account payee cheque and possession was also given to the buyer. It was also held that the lower authorities erred in applying the valuation of the impugned property as per the stamp duty guideline in the year in which sale deed wa registered. Therefore in the present case also applicability of the provisions of section SOC should be looked at only on the date of sale agreement which is 18/06/2008. As on the date of transfer the guideline, stamp duty value of the property sold was Rs. 100,00,000/- per hectare. A certified copy of the Stamp Duty Value for financial Year 2008-09 is herewith submitted. This should be taken as the stamp duty value for the purpose of section 50 C of the Act. 6. The assessee has relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of Property Act, 1882 (4 of 1882), to be registered shall- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1887 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument. 20. The effect of the aforesaid amendment is that, on and after the commencement of the Amendment Act of 2001, if an agreement, like the JDA in the present case, is not registered, then it shall have no effect in law for the purposes of Section 53A. In short, there is no agreement in the eyes of law which can be enforced under Section 53A of the Transfer of Property Act. This being the case, we are of the view that the High Court was right in stating that in order to qualify as a transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no change in membership of the society, as contemplated. We are afraid that we cannot agree with the High Court on this score. Under Section 2(47)(vi), any transaction which has the effect of transferring or enabling the enjoyment of any immovable property would come within its purview. The High Court has not adverted to the expression or in any other manner whatsoever in sub-clause (vi), which would show that it is not necessary that the transaction refers to the membership of a cooperative society. We have, therefore, to see whether the impugned transaction can fall within this provision. 22. The object of Section 2(47)(vi) appears to be to bring within the tax net a de facto transfer of any immovable property. The expression enabling the enjoyment of takes color from the earlier expression transferring , so that it is clear that any transaction which enables the enjoyment of immovable property must be enjoyment as a purported owner thereof. 1 The idea is to bring within the tax net, transactions, where, though title may not be transferred in law, there is, in substance, a transfer of title in fact. 7. Therefore, in view of the judgment of Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. DR and carefully perused the impugned orders of the authorities below. The assessee has claimed legal expenses of Rs.3 lac as cost of purchase. The AO ask the assessee to furnish the details and evidence in this regard but the assessee did not furnish any detail of expenditure or evidence in support of the claim. The AO recorded the fact that there was some legal dispute with the respect to the purchase of property and purchase deed was registered on the order of the Court. Accordingly, the AO estimated the expenses at Rs.50,000/-. It is manifest from the record that except making a claim of Rs.3 lac as legal expenses regarding the purchase of the property the assessee has not furnished any details of such expenses nor any evidence in support of the said claim. Accordingly, in the facts and circumstances of the case, we find that estimation of Rs.50,000/- made by the AO is reasonable and proper. Hence, we do not find any substance on merits in the ground no.3 of the assesse s appeal and same is dismissed. 11. In the result, appeal of assessee is partly allowed for statistical purposes. Order pronounced in the open court on 20.04.2023. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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