TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 1114
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....ssee on sale of properties. In the appeal of the assessee the dispute revolves around the action of the income-tax authorities of invoking section 50C of the Act for substituting the value adopted by the Stamp Valuation Authority for the purpose of the payment of stamp duty as full value of consideration as against the actually received consideration considered by the assessee in order to compute the capital gain. 3. In brief, the relevant facts in order to determine the controversy in the appeal of the assessee can be understood as follows. The assessee before us is a statutory body incorporated under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963. During the previous year relevant to the assessment year consideration, assessee was found to have sold two properties through public auction. In relation to property bearing Survey No.231 admeasuring 1H 34R, it was sold for Rs. 91,00,000/- whereas another property bearing Survey No.477/2 & 477/3 was sold for a consideration of Rs. 15,51,000/-. Both the properties were sold in public auction after obtaining the necessary permissions from the State Government of Maharashtra. In terms of the conditions of auction, ....
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.... obtained in public auction as the fair market value for the purposes of stamp duty. Therefore, for the purposes of payment of stamp duty also the price at which the properties have been sold by the assessee is to be considered as the fair market va4lu e and in support reference has been made to a Circular issued by the Inspector General of Registration and Controller of Stamps, Government of Maharashtra dated 30.06.2005, a copy of which has been placed on record. In this context, reference was also made to the proviso to rule 4(6) of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, which reads as under :- "Provided that whenever a certificate about market value of a particular property is issued by an Appropriate Authority under provisions of Income Tax Act, or if a property is sold or allotted by Government or Semi-Government body or a Govt. undertaking or a Local Authority on the basis of predetermined price, then value stated in such certificate issued by an Appropriate Authority or determined by the bodies referred to above shall be true market value of the subject matter property." 6. On the aforesaid basis, it is sought to be canvassed that t....
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.... 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 inter-alia, 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 the full value of consideration in cases wher....
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....ough 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 capital gain would fail since there would not be any differential between the stat....