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2015 (12) TMI 45
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.... case, the reference was already made by the sub registrar to the collector stamps, who valued the property at Rs. 12,47,34,260/- in place of Rs. 6,97,66,620/- assessed by the sub registrar." Ground of assessee's appeal:- 1. The learned Commissioner of Income Tax (Appeals)-II, Jaipur has erred in law and on facts in sustaining the application of provisions of Section 50C(1) in spite of the fact that there was no notified rate (i.e. DLC rate) for the land for stamp duty purpose and no registered sale deed for the transaction of sale (dated 18/04/2007) of Agriculture Land (referred as "Khatli Land" in the Jamabandi), situated in the bed of the demarcated Amani Shah Ka Nallah and within the catchment area of Goolar Dam, Sanganer, Jaipur. 2. Without prejudice to above, the learned Commissioner of Income Tax (Appeals)-II, jaipur has further erred in adopting the value of said land determined by the DVO (who presumed that the said land can be used for residential purpose, ignoring the legal and geographical restrictions which came to and brought to his knowledge through copies of the notified Master Plan of Jaipur City, JDA letter dated 02/02/2011, and by his spot vi....
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.... Sub-Registrar for his comments. The Sub-Registrar again rejected the assessee's objection and valued the property at Rs. 6,97,66,420/-. The copy of valuation report was again given to the assessee for his objection. The AR of the assessee submitted the detailed objection vide letter dated 29/11/2010 against proposed computation of capital gain, the argument of the assessee was that the stamp authority valuation is for the purposes of charging stamp duty and applicability of the provisions of Section 50-C. He objected that Section 50C is not applicable in the case of assessee on the following reasons:- 1. The land sold by the assessee lies in the bed of Amanishah Nallah, which neither residential nor commercial land. The land is 15-20 feet below the road level. The entire land gets submerged with water in rainy season. The area is recorded as Khatli in the government record. It does not have any civic amenities. The land was not a saleable property. 2. The Sub Registrar has applied the DLC rates of residential area while determining the above referred value of the land. 3. The Sub registrar is not competent to determine the market value of any property and it should have b....
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....gistrar, then he can file appeal before the Collector (Stamps) against market value being adopted by the Sub Registrar. Aggrieved person can further appeal against the order of the Collector (Stamps) before the Revenue Board. As per Section 50C of the Act, where the consideration received or accruing as a result of 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 an authority or a State Govt. (Stamp Valuation Authority) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purpose of Section 48, be deemed to the full value of consideration received or accruing as a result of such transfer. He further observed that the word 'assessable' in Section 50C was inserted w.e.f. 01/10/2009. The assessee had not presented the PARIPURN PRATIGYA PATRA before the Sub Registrar, though it was mandatory with a motive to evade payment of stamp duty by the assessee and the purchaser of the property and cause loss to the state government exchequer. The assessee had not filed any appeal before the competent appellate authority against the....
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....ocess of 90B (conversion of land) was still not yet complete and pattas were yet to be issued in the name of the allottees. He further held that the valuation adopted by Sub-Registrar, Sanganer-I, Jaipur did not have any legal sanctity and therefore any addition made by the A.O. on such valuation did not have legs to stand. Even as per revenue records, the land in question was "Khasara" and the Sub-Registrar had himself admitted that there were no DLC rates for agricultural land in the concerned area. Therefore, he could not have applied DLC rate applicable to residential area situated far away from the land of the appellant. The DLC rates of the plots lying in the Nallah were between Rs. 660/- to Rs. 715/- per sq. mt. as on the date of transaction. The Collector (Stamps), Jaipur-II vide her order dated 01/08/2011 had assessed the stamp duty at Rs. 12,47,34,360/- in respect of land in question as on 09/11/2010 i.e. that date on which proceedings were initiated against the assessee. It is not in dispute that the appellant had sold the land about 3 year back on 18/04/2007. The Collector (Stamps) on the other hand had assessed the value of land for the purpose of stamps duty as on 09/....
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....ated supra. Therefore, the right of an assessee conferred under section 50C of the Act is a valuable statutory right available to protect his interest against any arbitrariness which may creep in while fixing the value of the capital gain and that is the safeguard given to the assessee. The said right is more effective in cases where the parties to the document have not taken any steps to defend or to initiate proceedings under Section 47A of the Indian Stamp Act. The Assessing Officer was bound to follow the sub-section (1) of section 50C or to adopt the lower of the value fixed by the DVO or the value as determined by the stamp valuation authority as per sub-section (3) of Section 50C. For this proposition, the reliance is placed on the decision of the Hon'ble Lucknow Bench in the case of Jitendra Mohan Saxena Vs. ITO (305 ITR (AT) 62). The reference to the DVO under Section 50C(2) is not discretionary, but mandatory for which reliance is placed on the decision of the Hon'ble Jodhpur Bench in the case of Meghraj Baid Vs. ITO (114 TTJ 841). Thus as per Section 50C(1), the valuation as fixed by the stamp valuation authority is taken as a bench mark, as per sub-section (2) of sectio....
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....referring the matter to the Valuation Officer under section 50C(2) of the Act and then to decide the issue accordingly under the law. This decision is fully applicable to the facts of the present case. Though the present A.O. had not made any reference to the DVO however ITO, Ward 7(2) Jaipur had made a reference to the DVO in the case of other co-owner namely Smt. Shanta Devi Jain for the land in question. Therefore, the A.O. is bound to follow the report of the DVO for application of provisions of section 50C. However, since the DVO had assessed the value of land in question at Rs. 1,27,07,500/- in the case of other co-owner i.e. Smt. Shanta Devi Jain, the A.O. should have adopted the lower of two values i.e. the value assessed by Collector (Stamps), Jaipur-II or the value adopted by DVO following the provisions of Section 50C(3). He, therefore directed the Assessing Officer to adopt the value of Rs. 1,27,07,500/- for substituting the sale consideration instead of Rs. 6,97,66,620/- taken by him. These grounds of appeal are therefore partly allowed. 4. Now both are in appeal before us. The ld Sr. DR has argued that the stamp authority had valued the impugned land by considering....
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....cable on amendment made in Section 50C i.e. word 'assessable' has been added w.e.f. 01/10/2009. It means that the provisions are not applicable retrospectively. He further argued that the same view has been expressed by the Jaipur ITAT in the case of Sh Pramod Chand Soni Vs. DCIT (2012) 6 Tax Corp (A.T.) 27781 (Jaipur) order dated 03rd January, 2012. He further argued that the the Hon'ble ITAT, Jaipur Bench, Jaipur in the case of DCIT Vs. Ashok Kalani in ITA No. 249/JP/2008 order dated 28/11/2008 wherein facts are identical i.e. sale deed has not been registered with the registering authority. The amended provision of Section 50C has been considered, which was effective from 01/10/2009 and allowed the assessee's appeal as the A.O. gathered information regarding DLC value from registering authority and on that basis, the sale consideration in terms of provisions of Section 50C was worked out and additions were made on account of long term capital gain. He further argued that the ld CIT(A) was also not justified to adopt the DVO valuation got done in case of co-owners U/s 50C of the Act as the same is also not applicable in the case of assessee. Thus, he prayed to allow the assessee'....
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....land, under the notified Master Plan is reserved for flow of City's waste, rain, sewage water and the land parallel to the banks of the Nalla has been stated as flood affected and reserved for green belt. (f) The land is classified as "KHATLI" in the revenue records of the State Government. The terms "Khatli" is used for stating that the land gets water logged and fit only for agriculture purpose. (g) The Rajasthan High Court, in the case of Abdul Rahaman vs. State of Rajasthan & Others has also directed the State to restore the status as of 15.08.1947 of all Nalla, Rivers, Tributaries etc. by removing all encroachments therein. 6.3. Further, in the Addendum Index of Papers at page 112 the assessee has mentioned as under :- " In addition to above, it is humbly submitted that section 50C is not applicable to the appellant's case under consideration. Kindly refer to the Fact No. 19 mentioned herein above first on page 5 of these submissions. It is an established fact that the land under reference is owned by the State Government as is evidenced by the copy of the JAMABANDI placed at page number 35 of the PB. The assessee has got rights only for agriculture operations on t....
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....ains arising from the transfer of capital asset effected in the previous year shall save as otherwise provided in section 54 to 54H be chargeable to income tax under the head Capital Gain and shall be deemed to be the income of the previous year in which transfer took place. What is relevant for the applicability of section 45 is Profit or Gain arising from the transfer of capital asset effected in the previous year. It is only in the nature of capital asset transferred in the year which is to be taken into consideration for computing the profit and gain chargeable to tax under the head Capital Gain. The capital asset has been defined in section 2(14) as under :- Section 2(14) : "(14) "capital asset" means-- (a) property of any kind held by an assessee, whether or not connected with his business or profession ; (b) any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), but does not include-- (i) any stock-in-trade [other than the securities referred to in subclause (b)], consumable stores or raw materials held for the....
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....) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999, notified by the Central Government ;" Thus the capital asset means the property of any kind held by the assessee whether or not connected with his business or profession. In the present case, the assessee, stated to have owned the property in the agricultural land mentioned in the agreement dated 18.04.2007. Section 50C of Income-Tax Act, 1961 (2015) ^85[Special provision for full value of consideration in certain cases. ^85a 50C. (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 86[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 stamp duty in respect of such transfer, the value so adopted or assessed 86[or assessable] shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. 2 -------------------------------------------------- 6.8. On going through the above provisions, it ....
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.... Bench, the long term capital gain cannot be calculated by invoking the deeming provisions provided under section 50C. Therefore we hold that section 50 C is not applicable to present case. This is also of view of Mumbai Tribunal in the case of Atul G. Puranik vs. ITO (2011) 11 ITR (Trib.) 120. 6.12. Even otherwise, the assessee has sold the property on 18.04.2007 and has filed the return of income on 31.07.2008. At the time of selling the property to the purchaser the sale consideration shown by the assessee in the document executed was Rs. 74,91,000/- only and has shown the capital gain to the extent of 50% in the return of income, being the half ownership rights in the property. The agreement was neither registered nor properly stamped and was merely executed on the stamp paper of Rs. 100/-. Section 50C as available ,in the rule book ,on the date of filing of the return or on the date of transfer of the land provides as under :- Section 50-C as per IT Act 2007 : " Section 50C. (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 by any au....
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....sessed (or assessable) by any authority or a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed (or assessable) shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where - (a) the assessee claims before any Assessing Officer that the value adopted or assessed (or assessable) by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed (or assessable) by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, The Assessing Officer may refer the value of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-se....
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....ransactions undertaken on or after such date." 9. Learned counsel for the Revenue is not disputing about the existence of such circular issued by the Board. If the Board has issued a circular clarifying the applicability of section 50C in pursuance of the amendment made by the Amendment Act 2 of 2009, we fail to understand as to how the Revenue can canvass the same issue in this case which in effect is against the circular issued by the Board. Certainly, the Revenue is bound by the circular issued by the Board. At this juncture, it is pertinent to note that in a decision made in the case of State of Tamilnadu v. India Cements Ltd. reported in [2011] 40 VST 225 (SC), the honourable Supreme Court has held that the circulars issued by the Revenue are binding on the Department and, therefore, they cannot repudiate that they are inconsistent with the statutory provisions. The relevant paragraphs 21 and 22 are extracted hereunder (page 237) : "21. It is manifest from the highlighted portion of the circular that as per the clarification issued by the Commissioner of Commercial Taxes, in exercise of the power conferred on him under section 28A of the TNGST Act, the benefit of t....
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....ed the capital asset for a consideration of Rs. 74,91,000/- and the document was neither registered nor evaluated for the purpose of stamp duty purposes by the Stamp Valuation Authority at the time of execution of said document . Therefore, there was no evaluation of stamp duty payable on the document. Thus in our view the deeming provision of section 50C do not come in to play thereby replacing the full valuation of consideration of the document with the value calculated by the Stamp Valuation Authority / registering Authority. In the absence of any adoption or assessment by the authority of state government for the purposes of the Stamp duty in respect of subject transfer ( as the document was not registered ), there was no occasion for the AO to either refer the matter to the Registering Authority or to the Stamp Valuation Authority for the purpose of arriving at the valuation of the property. 6.13. Therefore, in the interest of justice we set aside this issue to the Assessing Officer and directed to apply the provisions of Income Tax including Section 55A to determine the correct capital gain in this transaction and decided the case after considering the above observations o....