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TMI Blog2024 (7) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, we are unable to concur with the same, accordingly the order of Ld. CIT(A) is liable to be set aside. Further, we may herein observe that since the stamp duty valuation of the subject land as on the date of agreement i.e., 31.03.2014 was Rs. 49,86,000/- which was also the actual consideration received by the assessee as emanating from the assessee s reply before the Ld. AO, which was not disputed by the revenue, therefore, we direct the Ld. AO to vacate the addition, and recompute the capital gain adopting the full value of consideration being the value of land for stamp duty purpose as on the date of agreement to sale. Resultantly, ground no. 1 of the assessee stands allowed. - Shri Ravish Sood, JM And Shri Arun Khodpia, AM For the Assessee : Shri Veekaas S. Sharma, CA For the Revenue : Shri Satya Prakash Sharma, Sr. DR ORDER PER ARUN KHODPIA, AM: The captioned appeal is filed by the assessee against the order of Commissioner of Income Tax, Appeal, ADDL/JCIT (A)-12, Mumbai (in short Ld. CIT(A) ), u/s 250 of the Income Tax Act, 1961 (in short The Act ), for the assessment year 2015-16 dated 03.04.2024, which in turn arises from the order of Assistant Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopers and during the year under consideration, the assessee has sold a piece of land at Cherikhedi for a consideration of Rs. 49,86,000/-. The returned of income for the AY 2015- 16 was filed by the assessee on 30.09.2015, declaring a total income at Rs. 44,23,530/-. The case was subsequently selected for limited scrutiny assessment on the basis of following reasons: (1) Large value sale of futures (derivative) in a recognized stock exchange (STT Code 5). (2) Mismatch in sales turnover reported in Audit Report and ITR. (3) Large value sale of futures (derivative) in a recognized stock exchange (STT Code 5). (4) Sale consideration of the property in ITR is less than sale consideration of property reported in AIR. 3.1 Accordingly, notices u/s 143(2), 142(1) and questionnaire in terms of section 142(1)(ii)/(iii) of the Act were issued. In response, assessment proceedings were attended, and submission were made by the counsel of the assessee. During the assessment proceedings, Ld. AO has observed that the assessee had sold a land at Cherikhedi for Consideration of Rs. 49,86,000/-, for which an agreement for sale was executed on 31.03.2014, i.e., in the preceding FY 2013-14 (relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of the application of' 'the provisions of section 50C. The agreement to sale may bind the parties' inter-se but does not override the statutory provision as are applicable on the date of transfer . Section 50C has been introduced to cover those cases where the consideration received or accruing as a result of transfer is less than the value adopted by the stamp duty authority in respect of such transfer and therefore, the case of the assessee is covered by ambit of these provisions. (3) The Supreme Court, in the case of Suraj Lamp Industries Pvt. Ltd. Vs. State of Haryana Anr., held that the transaction of the nature of 'Sale Agreement transfers do not convey title and do not amount to transfer, nor can they be recognized as valid mode of transfer of immoveable property and that the Courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. The judgement was passed by a Bench Justice R.V. Raveendran, Justice AK. Patnaik and Justice H.L. Gokhale. Court's Observations: (a) Any contract of sale (agreement to sell) which is not a registered dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty, include contact details of the seller and the buyer, the negotiated price will be mentioned and also how this payment is being disbursed. The time frame for the payment will be included. There will also be a provision for the payment of stamp duty and for the account of the property title. As per Section 54 of Transfer of Property Act, a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property. The Hon'ble Apex Court in many earlier judgments after recognizing various provisions of law has held that a contract of sale at the most creates a fiduciary character of the personal obligation and is annexed to ownership but does not in any way amounts to an interest or easement therein. Therefore, transfer of immovable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of sections 54 and 55 of TPA and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act disregarding the fact that agreement of sale of land was executed on 31.03.2014 and part consideration was also received through proper banking channel on the date of agreement, therefore, stamp duty value as on the date of agreement was relevant in view of the amendment brought in by the Finance Act, 2016, which is curative in nature and therefore, has retrospective effect and Ld. CIT(A) had perpetuated the error committed by Ld. AO, while confirming the addition to the extent of Rs. 99,400/- holding the amendment brought by Finance Act, 2016 to be prospective in nature which is unsustainable, hence addition is absolutely illegal, arbitrary and unjustified. On this issue, to support the factual aspect of the case, Ld. AR drew our attention to page no. 12 of assessee s paper book, consisting of the copy of agreement (Ikrarnama) dated 31.03.2014, wherein at para 2 of the said agreement, it is discernible that the subject land was agreed to be sold by the assessee to Harsh Vatika through its partner, Shri Sharad Goel, the consideration decided was Rs. 97.00 lac out of which an amount of Rs. 1.00 lac was paid through NEFT/RTGS i.e., through proper banking channel by the buy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is given to the vendor as advance on the date of execution of the Agreement. There are other types of transaction where the vendor executes Power of Attorney in favour of the intending purchaser empowering him to sell the property at any time he proposes to do so. In fact, this was also a subject matter of consideration, when the legislature though to introduce the amendment to section 50C of the Act. There may be cases where the sale consideration will be taken as deferred payment subject to certain contingencies. However, the case on hand is very straight forward case, where there is an Agreement for Sale, agreeing to sell the property at Rs. 19 Crores and a sum of Rs. 6 Crores has been received as advance sale consideration. The proviso to Section 50C(1) of the Act deals with cases where the date of the agreement, fixing the amount of consideration and the date of registration for the transfer of the capital assets are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer. Thus an amendment by insertion of proviso seeks to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trospective from the date when the proviso exists. The CIT(A) while allowing the assessee s appeal vide order dated 25-7-2019, took note of the submissions made by the assessee wherein they placed reliance on the decision of the Ahmadabad Bench of the Tribunal in the case of Dharamshibhai Sonani v. Asstt. CIT [2016] 75 taxmann.com 141/161 ITD 627, order of the Delhi Bench of the ITAT in the case of Income tax Officer v. Modipon Ltd. [2015] 57 taxmann.com 360/154 ITD 369. (emphasis supplied by us) 8. Based on the principle of law emanating from the aforesaid judgment, it was the submission of Ld. AR that under the settled principle of law, the amendment brought in by the Finance Act, 2016, introducing the first proviso to section 50C(1) was for retrospective effect, therefore, the same should be applied in present case of the assessee. 9. Accordingly, it was the prayer that the amount for Rs. 99,400/- confirmed by the Ld. CIT(A) on account of her conviction based on observations of the Ld. AO that the amendment introduced by Finance Bill, 2016 is effective prospectively from 01.04.2017, therefore, not applicable for the AY 2015-16 relevant for the present case, was bereft of merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r decisions relied on by the Id. counsel for the assessee also support the case of the assessee that where the date of the agreement fixing the amount\of consideration and the date of registration regarding the transfer of the capital asset in question are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of the agreement is to be taken for the purpose of full value of consideration. I, therefore;' accept the argument of the Id. counsel for the assessee in principle and restore the issue to the file of the Assessing Officer with a direction to verify necessary facts and decide the issue in the light of my above observation directing to adopt the circle rate on the date of agreement to sell in order to compute the consequential capita, gain. Bellandur Chikkagurappa Jayaramareddy vs. Assistant Commissioner of Income Tax (2022) 193 ITD 757 (Bang) 827 in ITA No. 1322/Bang/2019, AY 2014-15; 48. There was payment of Rs. 2,50,00,000 on 23.11.2011 by cheque No.259865 drawn on Vijaya Bank, Sarakki Branch, Bangalore. Being so, the argument of the ld. DR is that MoU is not suggesting any payment so as to apply the proviso to section 50C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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