TaxTMI 
TaxTMI 
2012 (11) TMI 1112
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.... was notarised by the assessee but not registered with registration authorities. 4. The CIT(A) would not have allowed the assessee to submit additional evidence which was not filed by the assessee before the Assessing Officer and would have given due cognisance to the remand report submitted by the Addl. CIT, Range-11, Hyderabad. 3. Brief facts of the issue are that the assessee along with his brother Mr. S. Venkat Reddy and two others acquired a property at 7-2-1813/5/A/1, Sanath Nagar, Hyderabad through a sale cum GPA agreement on 25.4.2005 for Rs. 25,000,000. The assessee's share in the property is 40%. The particulars of other co-owners along with their share holding are as under: Sl. No. Co-owner Extent of share 1. S. Venkat Reddy 40% 2. Mahaveer Infoway Ltd. 10% 3. Purushottam Mandhana 10% 4. The assessee had entered into an agreement of sale cum GPA on 13.6.2005 with M/s. Victator Homes for sale of the above immovable property for a sum of Rs. 2,75,00,000. As per clause 7 of the agreement the possession of the property was given to M/s. Victator Homes on the same day. The Agreement of Sale was notarized and finally t....
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....tion 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 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." Thus the provisions of Section 50C are applicable whenever: (a) the value adopted by the Sub-Registrar for the purpose of levying stamp duty is higher than the consideration as per the document. (b) The value fixed by the Sub-Registrar is accepted and not challenged and the stamp duty as demanded is paid. " 7. In response to the above show cause notice the assessee has made the following submissions: (a) "Assessee has entered into an agreement of sale on 13.6.2005 with GPA cum Agreement holders. A copy is enclosed. It could be seen from the agreement that the possession of the property is handed over on the same day i.e.13.6.2005.as per clause 7 of the Agreement at page 4 and the part consideration of Rs. 1,00,00,000 also is paid by the date of agreement. (b) This agreement is also mentioned in the last paragraph of the sale deed at page 8. (c) I submit that as per th....
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....visions of section 50C are not applicable in these cases as original sale agreement was made vide sale agreement dated 13.6.2005 through which the possession given to the purchaser which is also evident by the recital in the agreement of sale, the affidavit of the advocate and the rectification of sale deed vide rectification deed dated 14.10.2009. At the time of agreement of sale, guideline value for registration is different and thereafter there was change in the SRO value. The CIT(A) was of the opinion that the date of sale deed executed on 25.11.2005 cannot be considered for determining the SRO value and thereby invoking provisions of section 50C of the Act is improper. It is because transfer has already taken place on 13.6.2005 and the execution of registered sale deed on 25.11.2005 was merely a formality to confirm the legal ownership of the purchaser. Against these findings of the CIT(A), the Revenue is in appeal before us in ground Nos. 1 to 4. 10. The learned DR submitted that provisions of section 50C are mandatory with effect from 1.4.2003 and the property considered to be sold by the assessee vide Absolute Sale Deed executed on 25.11.2005. According to the DR no cred....
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.... according to the provisions of sec 50C where the consideration received are accrued as a result of transfer by the assessee of a capital asset being land or building or both, is less than the value adopted or assessed by any authority of a state government. For the purpose of payment of stamp duty in respect of such transfer the value adopted or assessed shall, for the purpose sec 48, be deemed to be the full value of consideration received or accruing as a result of such transfer. Section 50C is applicable only on registration of sale deed and not otherwise. For the same proposition the DR also relied on the order of Tribunal Jodhpur Bench in the case of Navneet Kumar Thakkar v. ITO [2008] 110 ITD 525 (SMC). 13. On the other hand on the above issue the AR submitted that as per section 2(47)(v) the property has been transferred vide agreement dated 13.6.2005 as all the conditions laid down u/s 2(47)(v) have been fulfilled as possession of the property has been given. The registration of sale deed dated 25.11.2005 is only a legal formality. He submitted that the date of transfer has to be considered as 13.6.2005 instead of 25.11.2005. Further he submitted that after entering int....
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....t the fact of possession being given on 13.6.2005 and therefore the transfer took place on 13.6.2005 notwithstanding the fact that the Registered Sale Deed was executed on 25.11.2005 which was only for the purpose of confirming Title under the Transfer of Property Act. The decision of the Tribunal in the case of Navneet Kumar Thakkar (Supra) according to the assessee supports its case. The AR further submitted that the onus of proving the receipt of consideration adopted for stamp duty purposes was on the department and in its absence the consideration disclosed by the assessee as stated vide Agreement of Sale by 13.6.2005 should be adopted as transfer within the meaning of section 2(47) of the Income Tax Act took place on 13.6.2005. Therefore, it was pleaded that the capital gains as reported be accepted. He relied on the following judgements: (a) CIT v. Chandni Bhuchar [2010] 323 ITR 510/191 Taxman 142 (Punj. & Har.) wherein held that the view taken by the Tribunal while accepting the order of the Commissioner (Appeals) did not suffer from any legal infirmity. The argument of the Revenue that the Tribunal should have asked the Assessing Officer to make a reference to the Valua....
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....way of sale takes place only on the execution of the sale deed as provided in s. 54 of the Transfer of Property Act. But, for the purposes of the IT Act notional/ artificial transfer is effected on the date when transfer of possession is made under s. 53A of the Transfer of Property Act. The object of introduction of s. 2(47)(v) in this Act is easily discernible. In my considered opinion, it was only to make any amount which is received by transfer from the date of such notional/artificial transfer as income, this provision has been made. Before introduction of this provision by Finance Act of 1988 with effect from 1st April, 1988, there was no such provision anywhere in the Act. Therefore, prior to 1st April, 1988, the legal position was that the transfer will take place only as per the provisions of the Transfer of Property Act. Therefore, any amount received prior to such transfer would be only part of sale consideration, though it might have been received under any name like interest. Only to prevent such kind of evasion, probably, the Parliament had thought it fit to introduce the said provision with effect from 1st April, 1988. This would only to go indicate the correctness o....
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....avit from the advocate namely D. Jitendra Kumar was also filed. According to the DR clause no. 3 of the sale deed shows that the possession of the property has been given to the purchaser on the date of sale deed. Being so, there cannot be handing over of the same property at two times. She submitted that there cannot be transfer even under section 2(47)(v) of the act. We have carefully gone through submission of the learned DR. The law is that provisions of the section 50C are applicable on registration of sale deed. As per provisions of section 50C valuation adopted for stamp valuation purposes is to be considered as the consideration received or accrued to the assessee. Thus only on registration of sale deed the provisions of section 50C are applicable. However when the assessee is not accepting the value mentioned in the sale deed for stamp valuation purposes on the treating the same as consideration received on transfer of the property the assessee could exercise the provisions of 50C(2) of the IT Act to refer the matter to the DVO. In the present case, the assessee has not exercised this option and only challenged the adoption of the value considered for stamp valuation purpo....