TaxTMI 
TaxTMI 
2016 (5) TMI 628
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....d'. 3. As far as the additional grounds, Ground No. 1 pertains to a claim that transfer of the land was completed in the year 2000 itself, this claim was neither made before the authorities nor any evidence that assessee has entered into any transaction for handing over the possession was placed before us. The only recital in Clause-2 in page No.2 indicates that property was handed over in 2000. Since this is a fact which require fresh examination, the legal grounds cannot be entertained. Therefore, additional Ground No. 1 is rejected. 4. Additional Ground No. 2 is similar to the other grounds on the issue of invoking the provisions of Section 50C(1), accordingly, the same is allowed to be considered. Thus, the material grounds required for adjudication are as under: "3. The learned Commissioner of Income Tax (A) has erred in confirming the application of the provisions of Section 50C(1) of the I.T. Act, to the property in question. 4. In the facts and circumstances of the case, learned Commissioner of Income Tax (A) has erred in confirming the addition of Rs. 44,92,475/- as long term capital gains. 5. The learned Commissioner of Income Tax (A) has ....
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....property in favour of Sri M.Narayana Reddy, who got the property mutated in his name and got necessary entries made in the revenue records. He proceeded to construct a compound wall and took possession of the property. d) The assessee realized that the property was occupied by Sri M.Narayana Reddy and approached the MRO for mutation of the property in his name. e) In the meantime, Sri M.Narayana Reddy approached the assessee and sought compromise. The assessee surrendered the rights in the property in favour of Sri M.Narayana Reddy as he promised to pay an amount of Rs. 5 lakhs. Though it was agreed by Sri M.Narayana Reddy that he would make payment of Rs. 5 lakhs, he did not pay such an amount and continued to be in possession of the property. f) Realising that the promised sum can not be recovered from Sri M.Narayana Reddy, the assessee filed a petition before the Mandal Revenue Officer for mutation of the property in his favour. The MRO vide order No.A/631/97 dated 31/10/1997 rejected the request for mutation in the assessee's favour. g) The assesseerthereafter approached the Dy.Collector. The Dy.Collector held that the issue is a Civil li....
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....es determined by office of SRO, which has put the value at Rs. 45,00,000/-, and brought the resultant capital gains to tax: However; the appellant's contention was that the sale deed dated 26.07.2008 was only towards the transfer of claim, whereas the real possession was given in year 2000 only, because of civil disputes and petitions were made before Revenue Authorities, as the transferee Mr. Narayana Reddy did not pay the consideration of Rs. 5,00,000/- as promised. However, the property was transferred to Mr. Narayana Reddy as a final settlement and registered the property on 26.07.2008 and shown to have received the consideration of Rs. 5,00,000/-, as such could not pursue the matter to court as indicated in the order of RDO, R.R. District (East) dated 15.04.20085, and filed a compromise memo before Joint Collector, R.R. District on 02.08.2008. Hence, it was pleaded that provisions of Section SOC are not applicable and the Assessing Officer did not follow the procedure as laid down, by not referring to the valuation as per provisions of Section 50C(2), in case of application of Section 50C to the facts of this case, where the matter was indicative of involvement of civil di....
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....d that provisions of Section 50C are applicable to this case, and the addition made by the Assessing Officer, by applying the provisions of section 50C of I.T.Act, stand sustained. On this ground, the appeal is treated as Dismissed". 8. Ld. Counsel referring to the Paper Book and the submissions made before the authorities submitted that assessee even though has a title in his favour, but is not in possession of the property. Therefore, there is no option than to enter into compromise formula and according to the compromise formula only the property was registered in favour of Mr. Mundla Narayana Reddy and referred to the compromise memo filed with Joint Collector in Appeal No. 3341/2008. It was submitted that the transaction was concluded by way of compromise formula in which assessee has surrendered his claim for title for a value of Rs. 5 Lakhs and since the same cannot be considered as 'building or land' provisions of Section 50C are not applicable. He relied on the Co-ordinate Bench decision in the case of D. Anitha in ITA No. 394/Hyd/2014 / 373/Hyd/2014 dt. 24-12-2014. 9. Ld. DR however, submitted that assessee having registered the property as a transfer of agricultura....
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....to be in possession of the property by virtue of registered sale deed in his favour dt. 26-08-1996. In view of this, we agree with the contentions that assessee has transferred only a right of ownership but not the land and building. 11. Similar facts were considered in the decision of the Co-ordinate Bench decision in the case of D. Anitha in ITA No. 394/Hyd/2014 / 373/Hyd/2014 dt. 24-12-2014 (supra), wherein assessee was also not the owner of the property and had only limited rights over the property. It was held that the provisions of Section 50C are not applicable. The relevant para (Para 9) of the said order is as under: "9. As regards the issue involved in the appeal of the relating to the applicability of the provisions of S.50C in the case of the assessee, it is observed that the market value of the property for stamp duty purpose was determined by the concerned authority at Rs. 3,99,55,000 and accordingly the stamp duty thereon was also duly paid, while registering the relevant agreement. The value adopted for the purpose of payment of stamp duty thus was not disputed by the relevant parties, including the assessee. The learned CIT(A), however, held that the as....
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....r assessable by stamp valuation authority. But for this provision, there is nothing in the Act, by which the full value of a consideration received or accruing as a result of transfer of land or building or both is deemed to be any amount other than that actually received. From the language of sub-section (1), it is clear that the value of land or building or both adopted or assessed or assessable by the stamp valuation authority shall, for the purpose of section 48, be deemed to be the full value of the consideration received or accruing as a result of such a transfer. Two things are noticeable from this provision. Firstly, it is a deeming provision and secondly, it extends only to land or building or both. It is manifest that a deeming provision has been incorporated to substitute the value adopted or assessed or assessable by stamp valuation authority in place of consideration received or accruing as a result of transfer, in case the latter is lower than the former. It is further relevant to note that the mandate of section 50C extends only to a capital asset which is "land or building or both". It, therefore, follows that only if a capital asset being land or building or both i....