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TMI Blog2024 (8) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order dated 26/10/2022, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [ learned CIT(A) ], for the assessment year 2018 19. 2. In its appeal, the assessee has raised following grounds: 1. The order u/s. 143(3) r.w.s. 144B of the Income Tax Act passed is illegal, invalid and bad in law; 2. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi erred in confirming total addition of Rs. 3,56,100/- made by the assessing officer, therefore order passed is unjustified, unwarranted and excessive; 3. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi ought to have considered disallowance made in respect of difference in fair market value and sale consideration being only 11.46%, which is nominal in this line of business, therefore, addition confirmed u/s. 56(2)(x) at Rs. 3,56,100/- is unjustified, unwarranted and excessive; 4. On the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi ought erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had been paid by the bank. The Assessing Officer completed the assessment by making addition of ₹ 3,56,100, being the difference between fair market value of the property which exceeds consideration by an amount of ₹ 7,12,200, and restricted the assessee s share to 50% of ₹ 7,12,200 i.e., ₹ 3,56,100, under section 56(2)(x) of the Act. 6. The learned CIT(A) confirmed the order passed by the Assessing Officer by observing as follows: On perusal of the assessment order, it is observed that the assesse has purchased a property being land at Kh. No.746/2, situated at Gram Panchayat, Wadoda, Ph. No.27, Tahsil Kamptee, Dist Nagpur, for Rs. 55,00,000/- the value of which was determined at Rs. 1,41,75,000/-. During the assessment proceedings, the appellant stated that his share in the property was 50% i.e., 27,50,000/-(Total purchase consideration being Rs. 55,00,000/- and stamp value of entire property being Rs. 1,41,75,000/-). Further stated that the property was purchased in an auction conducted by Nagpur Nagrik Sahkari Bank Ltd., and the difference between the stamp value and purchase value could not be treated as his income as the property was purchased throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration. 7.6 In view of the above, it is evident that where an immovable property is purchased or received by a person for a consideration which exceeds the stamp duty value of the property by an amount exceeding Rs. 50,000/-, the amount by which the Stamp duty value of the property exceeds the consideration paid, shall be chargeable to income tax as income under the head Income From Other Sources . The only exception is mentioned in first proviso to the section and deals with date of agreement being different from date of registration in which case the stamp duty value of the property on the date of agreement fixing the consideration shall be the stamp duty value before the stamp duty authorities and has paid the stamp duty on the stamp duty value of the property mentioned above. Once the stamp value assessed in respect of the transferred property has become final and full consideration actually reported is less than such value, provisions of section 56(2)(x) of I.T. Act, 1961 are attracted instantly. 7.7 In view of the above, the said provision provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived or accruing as a result of such transfer for the purposes of computing the capital gain in terms of section 48 of the Act. In the present case, the Revenue has sought to justify invoking of section 50C of the Act primarily on the ground that the value adopted by the Stamp Valuation Authority for the purposes of payment of stamp duty in respect of transfer of the two properties in question is higher than the actual consideration accruing to the assessee as a result of their sale. The defence of the assessee is that the sale consideration stated in the sale deed is liable to be taken as the fair market value even for the purposes of payment of stamp duty in the present case because the sale/transfer in the present case is by way of a public auction conducted by a statutory body. Pertinently, the assessee is a statutory body incorporated under the provisions of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 and is inter alia, engaged in the activity of marketing of agricultural produce as a public utility. The moot question is as to whether the aforesaid proposition of the assessee is in accordance with law or not. 9. As noted earlier, the objective of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reckoner should be taken for that transaction.' 10. In the present case, the assessee before us is a statutory body and the sale of properties in question has been made through the route of public auction, which is not in dispute. The Commissioner (Appeals) has also reproduced the submissions of the assessee before him which inter alia contain averments that the sale of the properties was conducted in public auction, after seeking necessary permissions from the director of Panan of Maharashtra State. Factually speaking, in our considered opinion, the impugned transfers effected by the assessee by way of public auction fall within the purview of the Circular issued by the Government of Maharashtra dated 30-6-2005 (supra) for the purposes of payment of stamp duty. In terms of the said Circular, the highest price in the sale auction is considered to be the fair market value for the purposes of payment of stamp duty. This would mean that the consideration stated in the sale deed is to be accepted as the fair market value for the purposes of payment of stamp duty in the present case and not the prices worked out as per the ready reckoner. Ostensibly, in such a situation the invoking ..... X X X X Extracts X X X X X X X X Extracts X X X X
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