TaxTMI 
TaxTMI 
2017 (9) TMI 1686
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....and taking the full value of consideration for Rs. 20.00 lac without any basis for computing the capital gains u/s 48, instead of the value assessed by the Stamp Valuation Authority when the Tribunal was of the view that matter should be restored to the file of AO to send it to the DVO?" 3. Counsel for the appellant contended that the Tribunal has seriously committed an error in reversing the view taken by the CIT (A) which has confirmed the view taken by the A.O. on the issue that the price which has been fixed was changed on the date on which the transaction was valid, the DLC price was revised on 20.11.2006 and the document was executed on 8.1.2007, therefore, the Tribunal has assessed on the basis of new DLC price fixed by the Department. 4. However, it is contended by counsel for the respondent that while considering the matter, the Tribunal held as under: "6.2. We have considered the written submissions of both the parties and rejoinder of the assessee alongwith the order of the AO as well as the order of CIT(A) and various case laws. This is an undisputed fact that the agreement to sale was executed on 07.09.2006 for a total consideration of Rs. 13,81,00,000/-....
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....le property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. Under the Income Tax Act, it has been mentioned that any transaction, whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. 6.3. The Hon'ble Gujarat High Court in the case of CIT vs. Hormasji Mancharji Vaid (2001) 118 Taxman 276 (Guj)/(FB) has clearly held that when the transfer of document is executed and the property passes and merely because there is no registration certificate, the state coffers should not suffer. If the view is propounded that only on registration the act of transfer will be complete, then in that case, if the document is not registered, though the assessee will be enjoying the property, he will say that is not liable to pay the tax. But that is not the intention of the legislature. The word 'transfer' as indicated in the income tax act is required to be conside....
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....amp duty of Rs. 500/-. This general power of attorney has been cancelled vide cancellation deed dated 03.01.2007. The copy of this cancellation is available at pages 15 to 20 of the paper book. In the cancellation deed, it is not mentioned that general power of attorney has entered into an agreement for sale of land with M/s. Rising Build Estate Ltd. The copy of sale agreement is available at pages 1 to 4 of the paper book. The agreement has been made on 13.11.2006. In this agreement, it is mentioned that the assessee has sold the land which he has purchased. In this agreement, it is stated that the assessee has purchased the land through agreement and has also obtained the possession. The agreement with M/s. Rising Build Estate Ltd. by the assessee is not in the capacity of general power of attorney holder but has entered into an agreement as a person who has purchased the land through agreement for purchase of land. From these, it is clear that the assessee has transferred the rights in land and building and we are not inclined to accept that the assessee has not transferred the immovable property. Section 50C has been amended by the Finance Act, 2009 and the word 'asses....
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....hri Shailendra Soni. "2.4 We have heard both the parties. During the course of hearing before us, the Ld. AR stated that the issue under reference is covered by the order or the Tribunal in ITA No.42/JP/2010 dated 08.06.2010. The Ld. AR filed the copy of the order. It will be useful to reproduce para 5 of the order dated 8th June, 2010 in the case of Shri Dinesh Kumar Khatoria. "5. We have heard both the parties. Section 50C is applicable when consideration received or accruing is a result of transfer of capital asset being land or building or both. The word capital asset is defined in Section 2(14) of the I.T. Act and according to which capital assets means property of any kind held by an assessee. The assessee entered into purchase agreement for purchase of property. The assessee sold such agreements. Thus what the assessee has transferred is his right to purchase plots (7 of 13) [ITA-328/2011] as per agreement. Section 50C is applicable when consideration received or accruing is as per result of transfer of capital asset being land or building or both. Section 50C is a deeming provision which incorporates a legal fiction to adopt the stamp duty value a....
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....f a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for (8 of 13) [ITA-328/2011] computing capital gain. Further, it is proposed to insert a new Explanation so as to clarify the meaning of the term "assessable". This amendment will take effect from 1st October, 2009 as shall accordingly apply in relation to transactions undertaken on or after such date." Hence in the instant case, the AO was not justified in applying the provisions of Section 50C of the I.T. Act for increasing the short terms capital gain. The Ld. CIT(A) was justified in deleting the increase in the value of short term capital gain. It is not the case of the Revenue that the assessee has received more consideration as shown in the agreement. In case there was any evidence to show that the consideration received by the assessee was more than the consideration mentioned in the agreement then the Revenue could have increased the short term capital gain. On the basis of Section 50C of the Act, the AO was not justified in enhanci....
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....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, whichever is earlier, as is pleaded on behalf of the first respondent. It is trite law that circulars issued by the Revenue are binding on the departmental authorities and they cannot be permitted to repudiate the same ....
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....2 is as under: Unless context otherwise requires, transfer is to be understood in the simple meaning as it is indicated which includes sale, exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law. If the words are defined in the Act itself, then it is not proper to read the meaning of the similar words given in another statute unless otherwise expressly provided. In the Income-tax Act, wherever Legislature has thought fit to have the meaning of the word provided in different statute, specific provision has been made. In our opinion, therefore, 'transfer' as defined in the Act is to be given simple meaning as indicated. There are various methods by which there can be avoidance of tax. The tax evaders always keep faith in their counterparts. Even property is being transferred by merely executing special power of attorney on the stamp paper of Rs. 20 and the transfer deed is not executed as contemplated under the law. The transferor puts transferee in possession but in view of the document, namely, power of attorney executed by the transferor, it is said that the transferee is no....
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....ces, our answer would be that transfer of immovable property of the value exceeding Rs. 100 can be said to have been effected on the date of execution of the document. In view of this answer, it is not necessary to answer further questions. 3. Smt. D. Kasturi vs. Commissioner of Income Tax and Anr. (2010) 323 ITR 0040 4. We have carefully considered the respective submissions. In order that the doctrine of part performance as contained in Section 53A of the Transfer of Property Act to be invoked, it is necessary that the act or part performance must be such as not only be referable to the contract of which part performance is alleged, but be referable to no other title. The handing over of possession of agreement. All that is required is that an agreement in writing to be signed by the transferor which could be gathered from the evidence as will. The facts of this case would reveal that the agreement dated March 29, 1993, between the assessee and the agreement holder M/s. Chettinad Investments was with reference to the whole property. Clause (1) of the agreement contemplates that the vendor shall sell and the purchaser shall purchase the property in question. For ....
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....C embodies the legal fiction by which the value assessed by the stamp duty authorities is considered as the full value of consideration for the property transferred. It does not go beyond the cases in which the subject transferred property has not become the subjectmatter of registration and the question of valuation for stamp duty purposes has not arisen. By no stretch of imagination, the legal fiction confined to restricted operation can be widened to include within its sweep all the cases where "such property" has not been valued by the State authorities for stamp duty purposes. The Hon'ble Supreme Court in the case of CIT v. Amarchand N. Shroff MANU/SC/0196/1962 has held that "legal fiction are only for a definite purpose and they are limited to the purpose for which they are created and should not be extended beyond the legitimate field". Similar view has been reiterated by the Hon'ble Summit Court in the case of CIT v. Mother India Refrigeration Industries (P) Ltd. MANU/SC/0135/1985. Thus, what is relevant for the attract ability of Section 50C, is that the property which is under transfer from the assessee to another person should have been assessed at a higher value....
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....ion the addition was wrongly made and sustained. I, therefore, order for the deletion of the addition. 4.2 It is further contended that taking into consideration the actual agreement was prior to 20.11.2006, the view taken by the Tribunal is required to be accepted in favour of the assessee. 5. We heard the learned counsel for the parties. 5.1 It is well settled that the parties, if they admitted even after by a MOU and in view thereof, possession was already handed over on 4th October, 2006, no person is ready to give revised rates. 5.2 On the second issue, the Tribunal while considering the matter has observed specifically that there is no scientific method adopted and held as under:- 10. After considering the order of the AO and the CIT(A) and the written submissions, we are of the considered view that the assessee deserves to succeed in this ground in part. It is stated that property sold by the assessee was rented out for more than 50 years and was in possession of old tenants at the time of execution of sale deed. Hence, it can be reasonably inferred that such property shall not fetch prevalent market value when sold in the market as compared to ....