TaxTMI 
TaxTMI 
2017 (1) TMI 1849
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....ea, Yamuna Nagar. The assessee was, therefore, required to furnish copy of the Sale Deed of the said property. The assessee, in response, submitted that Shri Lavit Verma and Shri Himanshu Verma are sons of late Shri Raj Kumar (real brother of the assessee). Shri Vinay Verma and Shri Mohit Verma are sons of Shri Ashok Verma, real brother of the assessee and in the verbal family mutual settlement, it has been decided that the total area of the plot mentioned above will be transferred in the names of abovesaid four nephews and they will pay Rs. 26 lacs to the assessee. Shri Ashok Verma and Smt. Raman Verma, widow of late Shri Raj Kumar have given Rs. 13 lacs each to the assessee. Copy of the account and Court order for transfer of the plot were before Assessing Officer. It was, therefore, submitted that sale price of the plot was taken @ Rs. 26 lacs. The Assessing Officer, therefore, noted that no Sale Deed had been registered by the assessee in respect of the abovesaid property and value of the sale of plot have been claimed at Rs. 26 lacs as per mutual family settlement. The Assessing Officer referred to provisions of Section 50C of the Income Tax Act for the purpose of determining ....
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....tered. The ownership of the property is not transferred, only the inter-se right of the parties involved were settled and Rs. 26 lacs was received only as a mutual understanding between the assessee and the family members. There is, thus, no transfer of property, as such no capital gain arises in the case of the assessee. The rates provided by the Sub Register are not correct. The assessee further submitted that there is no estoppel against the law. The Assessing Officer was duty bound to adopt correct legal position. The nephew of the assessee was in possession of the property in financial year 2007-08 relevant to the assessment year 2008-09, therefore, without prejudice to the submissions of the assessee, it was further submitted that there was no transfer within the meaning of Section 2(47) of the Act in assessment year 2009-10 under appeal. 5. The ld. CIT(Appeals), however, did not accept contention of the assessee and referred to the decision of Hon'ble Supreme Court in the case of CIT Vs Rasik Lal Manik Lal (HUF) 177 I TR 198 in which it was held that a relinquishment takes place when the owner withdraws himself from the property and abundance his rights thereto. The l....
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....he "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. (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 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 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 valuation 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-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (2....
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....l be deemed to be the full value of consideration received or accruing as a result of such transfer for computing capital gain. 23.3 Further, Explanation 2 has been inserted in the subsection (2) of the section 50C, so as to clarify the meaning of the term "assessable". 23.4 Applicability- These amendments have been made applicable with effect from 1 st October, 2009 and will accordingly apply in relation to transactions undertaken on or after such date." 9. Hon'ble Madras High Court in the case of CIT V R.Sugantha Ravindran 352 ITR 488 has considered the identical question with reference to the amendment in Section 50C of the Income Tax Act in which the assessee alongwith two co-owners transferred the property through agreement to sell for a consideration to third party. The agreement was not registered and possession of the property was handed over to the buyer and the assessee also received sale consideration. The assessee worked out long term capital gain and admitted 1/3rd share therein for taxation. The Assessing Officer referred the matter to Stamp Valuation Authority in order to find out value of the property for payment of stamp duty. The Assessing....
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....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 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 Tamil Nadu and another Vs. India Cements Ltd. and another 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. Relevant paragraphs 21 and 22 are extracted hereunder: "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 the sales tax deferral scheme would be available to a dealer from the date of reaching of BPV or BSV, whiche....
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....he light of the circular issued by the Board. Accordingly, the Tax Case Appeal is dismissed and the substantial question of law is answered against the Revenue. No costs." 10. The ITAT Jodhpur in the case of Navneet Kumar Thakkar Vs ITO 110 ITD 525 held as under : " Sec. 50C does not apply to the cases in which the transferred property is not the subject-matter of registration and the question of valuation for stamp duty purposes has not arisen; assessee having transferred a property by executing an agreement which was not registered with the registering authority, s. 50C did not apply; reference made to DVO under s. 55A and addition, made solely on the basis of the report of the DVO is wholly invalid". 11. Considering the facts of the case in the light of the provisions contained under section 50C of the Act, amendment in Section 50C as explained vide Board's circular and decisions referred to above, it is clear that in the case of the assessee, no sale deed has been registered and the property was taken by the nephews of the assessee through verbal family settlement in the month of January,2008 which was confirmed by the judgement of the Civil Court dated 07.03....