AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 1032
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....e Act, for the reasons recorded by issuing notice u/s. 148 of the Act on 8.3.2011. The case has been selected for scrutiny and accordingly, notice u/s. 142(1) and 143(2) of the Act were issued. In response to notices, the authorized representative of the assessee appeared from time to time and furnished books of accounts and other details called for. 3. During the course of assessment proceedings, the A.O. noticed that the assessee has sold a residential house property at Dr.No.32-7- 3A, P.S. Nagar, Vijayawada for a consideration of Rs. 60 lakhs by way of registered un-possessory sale-cum-GPA vide document no.52/2007. As per the said document, the market value of the property for the purpose of payment of stamp duty has been fixed at Rs. 82,04,000/-. The assessee has computed capital gains by adopting sale consideration of Rs. 60 lakhs and claimed exemption u/s. 54 of the Act towards construction of another residential house property. During the course of assessment proceedings, in order to verify the applicability of provisions of section 50C of the Act and to ascertain the correctness of exemption claimed u/s. 54 of the Act, the A.O. issued a show cause notice and asked to fur....
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....r than residential house property. However, the assessee has transferred a residential house property, therefore, the provisions of section 54F of the Act are not applicable. The A.O. further observed that the assessee had invested the sale proceeds of the residential property before the date of transfer of the property. In order to claim deduction u/s. 54 or 54F of the Act, the assessee has to invest sale proceeds for construction of residential house within 3 years from the date of such transfer. Since, the construction of property was commenced before transfer of asset, the assessee is not eligible for exemption u/s. 54 or 54F of the Act. 5. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT (A). Before the CIT (A), the assessee reiterated the submissions made before the A.O. The CIT (A) after considering the explanations of the assessee held that the provisions of section 50C of the Act has no application when the property has been transferred by way of un-possessory sale-cum-GPA. The CIT (A) further held that the provisions of section 50C of the Act are applicable when the property has been transferred for a consideration which is less than t....
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....on 50C of the Act. 7. Having heard both the parties and considered the materials available on record, we find no merit in the arguments of the assessee for the reason that it is illogical and improper on the part of the assessee to say that the transfer within the meaning of section 2(47)(v) of the Act takes place, but no application of provisions of section 50C of the Act, when the property has been transferred by way of un- possessory sale-cum-GPA. It is an admitted fact that the assessee has transferred property by way of registered sale-cum-GPA. The assessee has computed long term capital gain by adopting sale consideration of Rs. 60 lakhs shown in the sale deed. The only dispute is that whether the provisions of section 50C of the Act are applicable or not when the property is transferred by sale-cum-GPA. In this case, admittedly, the assessee himself has admitted long term capital gain on transfer of asset. The moment transfer took place within the meaning of section 2(47)(v) of the Act, the deeming fiction provided u/s. 50C of the Act are applicable, when the sale consideration shown in the sale deed is less than the market value determined by the stamp duty authority for....
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....rescribe any condition as to the date of commencement of construction of new house property. The only condition is that construction of the house property should be completed within 3 years from the date of transfer. The date of commencement of construction is irrelevant and the construction may be commenced even before the transfer of asset as held by the Hon'ble High Court of Delhi, in the case of CIT v. Bharti Mishra [2014] 222 Taxman 2. A similar view was expressed by the Hon'ble High Court of Karnataka, in the case of CIT v. J.R. Subramanya Bhat [1987] 165 ITR 571, which was in turn followed by the Hon'ble High Court of Allahabad in the case of CIT v. H.K. Kapoor [1998] 234 ITR 753. Therefore, we are of the considered view that the assessee is eligible to claim exemption u/s. 54 of the Act, even though the construction of the new residential house was commenced prior to the date of transfer of original asset. In the present case on hand, on perusal of the facts available on record, we find that the assessee has commenced construction of new house property in the month of November, 2004 and completed construction in the month of March, 2007. The transfer of asset ha....
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....the meaning of the words full value of consideration as mentioned in section 50C of the Act as held by the coordinate bench of ITAT Jaipur in the case of Gyan Chand Batra v. ITO (2010) 6 ITR 147.. The relevant portion of the order is extracted below: "From sub-s. (1) of s. 50C, it is clear that in case the consideration received is less than the value adopted by stamp valuation authority then the value so adopted is to be taken as full value of the consideration for the purposes of 5. 48. Sec. 50C provides a deeming provision for considering the full value of consideration as the value adopted for stamp duty. In modern statutes, the expression 'deem' is used a great deal and for many purposes. It is at times used to introduce artificial conceptions which are intended to go beyond legal principles or to give an artificial construction of a word for phrase, Thus the artificial meaning of full value of the consideration has been given in s. 50C for the purpose of s, 48. One is entitled to ascertain the purpose for creating a statutory fiction. After ascertaining the purpose, full effect must be to the statutory fiction and it should be carried to its logical conclusion and ....