2018 (1) TMI 582

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....eferred to Board of Industrial Financial Reconstruction (BIFR), which declared the company as sick industrial company and appointed Industrial Development Bank of India (IDBI) as the operating agency (OA). As per the direction of BIFR, IDBI constituted assets sale committee (ASC) comprising the following members: 1. Chairman, IDBI 2. Dy. Zonal Manager, Bank of India 3. Joint Secretary, Govt. of AP and the Assessee. The above committee identified the factory land of 6.46 acres belonging to the assessee located at Industrial Estate Moulali, Secunderabad as surplus land which can be sold. Accordingly, in order to fix the reserve price, IDBI obtained valuation report from V. Jagannath Rao & Associates dated 07/12/2009, as per which, sale value was determined at Rs. 8.02 crores. Subsequently, news paper advertisements were given in leading newspapers like business standards, the Hindu, Eenadu on 12/05/2010 for inviting tenders for sale of factory land. The Committee received various tenders and the tenders were opened by ASC Committee on 26/06/2010. It has received highest bid from Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC), which is ....

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....Therefore the entire transaction took place between two government entities where there is no scope for payment of any unaccounted money. In this back ground it is pertinent to mention the decision of Krishi Utpanna Bazaar Samitee Vs DCIT in ITA 2043/PN/2012 dtd 20-3-2014. The facts in this case were, the assessee Krishi Utpanna Bazaar Samitee was a state body of a Govt. of Maharashtra. It sold two properties in a public auction and received an amount of Rs. 91,00,000/- and Rs. 15,51,000/-. The stamp duty value of these properties were Rs. 26,14,,000/- and Rs. 26,14,000/- respectively, and the same value was adopted for 5OC purpose. While adjudicating the issue, the Hon'ble Pune Tribunal observed that the Govt. Maharashtra issued a circular dated 30/06/2005 wherein it was stated for the purpose of stamp duty the value to be adopted is the amount recovered in public auction. The facts in the above case are identical to that of appellant case. Keeping in view the above discussion when the property was purchased by the government entity in public auction for an amount of Rs. 12 crores. The Assessing Officer cannot adopt the sale consideration at Rs. 21,88,97,000/- and inv....

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.... AP for an amount of Rs. 12 cores. The same was finalized and the factory land was sold to APIIC vide sale deed dated 17/05/2011. AO has invoked section 50C on the above transaction by merely relying on the SRO value for the purpose of stamp duty. In our considered view, AO cannot adopt SRO value u/s 50C for the following reasons: a) Sale was made by ASC Committee wherein the assessee is one of the Member as Joint Secretary. b) Assessee was never a decision maker in the above process of sale and always remain as a sick industrial undertaking under distress for revival. c) The purchaser is another public sector undertaking of Govt. of AP. d) The operating agency i.e. IDBI has obtained valuation report from the registered valuer determining the value of the property at Rs. 8.02 crores, which is far below both the SRO value as well as the value at which it was sold. e) Moreover, the AO has not brought on record any finding that the Assessee has received any other benefit directly or indirectly. By considering the above facts, in our considered view, the sale was distress sale. In this connection, we refer to the ratios laid down in the f....

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....terms of section 48 of the Act. In the present case, the Revenue has sought to justify invoking of section 50C of the Act primarily on the ground that the value adopted by the Stamp Valuation Authority for the purposes of payment of stamp duty in respect of transfer of the two properties in question is higher than the actual consideration accruing to the assessee as a result of their sale. The defence of the assessee is that the sale consideration stated in the sale-deed is liable to be taken as the fair market value even for the purposes of payment of stamp duty in the present case because the sale/transfer in the present case is by way of a public auction conducted by a statutory body. Pertinently, the assessee is a statutory body incorporated under the provisions of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 and is interalia, engaged in the activity of marketing of agricultural produce as a public utility. The moot question is as to whether the aforesaid proposition of the assessee is in accordance with law or not. 9. As noted earlier, the objective of section 50C of the Act is to substitute the value adopted by a Stamp Valuation Authority as ....

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....ore us is a statutory body and the sale of properties in question has been made through the route of Public auction, which is not in dispute. The CIT(A) has also reproduced the submissions of the assessee before him which inter-alia contain averments that the sale of the properties was conducted in Public auction, after seeking necessary permissions from the Director of Panan of Maharashtra State. Factually speaking, in our considered opinion, the impugned transfers effected by the assessee by way of public auction fall within the purview of the Circular issued by Government of Maharashtra dated 30.06.2005 (supra) for the purposes of payment of stamp duty. In terms of the said Circular, the highest price in the sale auction is considered to be the fair market value for the purposes of payment of stamp duty. This would mean that the consideration stated in the sale-deed is to be accepted as the fair market value for the purposes of payment of stamp duty in the present case and not the prices worked out as per the ready recknoer. Ostensibly, in such a situation the invoking section 50C of the Act for the purposes of substituting the full value of consideration in order to compute the....