TaxTMI 
TaxTMI 
2019 (2) TMI 1124
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....new ground which may be necessary. iii. The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the assessing officer be restored. 3. Rival contentions have been heard and record perused. Facts in brief are that assessee company is engaged in the business of manufacturing of drum closures and industrial plastic containers. During the course of assessment, AO found as under:- A. The appellant company first entered into an agreement with the Hindustan ' Petroleum Corporation Ltd. (HPCL) for the transfer of its land and factory building situated at Mahul Village, Chembur, Mumbai for a total sale consideration of Rs. 27,62,00,000/-. B. The value adopted by the stamp valuation authorities for the purpose of stamp duty was determined at Rs. 52,90,05,000/-. C. Thereafter, information was received from the DIT (I&CI), Mumbai on 10.12.2012, to consider the applicability of section 50C of the IT. Act, 1961, as during the year, the appellant has entered into a conveyance deed on 29.04.2009 for sale of land and factory building at Mahul for Rs. 27.62 cr and the value adopted by the stamp valuation authorities for stamp duty purpose was Rs.....
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....rabad Tribunal in the case of DCIT vs. Venkat Reddy (2013) 57 SOT 117 and requested that the relevant date should be taken as 14.08.2007 and the value adopted at Rs. 29.53 cr should be considered as FMV. 5. The above contention of the assessee company had been duly considered by the A.O. but was not found acceptable. The A.O. referred to the provisions of section 50C of the Act and observed that it was quite clear from the plain reading of these provisions that it provided for determination of the full value of consideration in certain special cases, for the purpose of computation of capital gain u/s.48 of the Act. That capital gain u/s.45 arises only on transfer of a capital asset and, therefore, the valuation u/s.50C(2) of the Act had to be made on the date when the capital asset under question had actually been transferred within the meaning of section 2(47) of the Act. On the facts of the case, in the case of the assessee company it could not be said that the transfer of capital asset was deemed to be on 14.08.2007 i.e. date of initial understanding. This was because, as on that date only some understanding was reached between the buyer and the seller, but the assessee company....
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....favour of the vendee, the vendor is restrained from selling the said property to someone else because the vendee, in whose favour the right in personam is created, has a legitimate right to enforce specific performance of the agreement, if the vendor, for some reason is not executing the sale deed. Thus, by virtue of the agreement to sell some right is given by the vendor to the vendee. The question is whether the entire property can be said to have been sold at the time when an agreement to sell is entered into. In normal circumstances, the aforestated question has to be answered in the negative. However, looking at the provisions of Section 2(47) of the Act, which defines the word "transfer" in relation to a capital asset, one can say that if a right in the property is extinguished by execution of an agreement to sell, the capital asset can be deemed to have been transferred. Relevant portion of Section 2(47), defining the word "transfer" is as under: "2(47) "transfer", in relation to a capital asset, includes,-.... (ii) the extinguishment of any rights therein; or,......,." Now in the light of definition of "transfer" as defined under Section 2(47) of the Act, it is cle....
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....hapatnam (ITA No.l2/Vizag/2009 dated 22.6.2010) and Moole Rami Reddy V/s. ITO (ITA No.31 l/Vizag/2010 dated 10.12.2010). It is therefore, now settled that the SRO value as on the date of agreement of sale has to be considered for the purpose of computation of capital gains." 5.11 The Hon'ble ITAT, Bangalore in the case of Bharathi Dev Anandani vs ACIT in ITA No.882/Bang/2014 vide order dated 12.02.2016 had also held that the date of agreement to sell is to be taken for determining the fair market value of the property as per provisions of sec,50C(2) of the Act. I also find that the Hon'ble Allahabad High Court in the case of CIT vs Shimbhu Mehra in ITA. No.373 Of 2010 in its order dated 12.10.2015 had referred to the decision of the Hon'ble Supreme Court in the case of Sanjeev Lal & Ann Vs. CIT & Anr. (2014) 365 ITR 389(SC)) and Explanation 2 to Section 2(47) of the Act which was added by Finance Act, 2012 with retrospective effect from 1.4.1962 and held as under: "14. In the light of the aforesaid provision, it is apparently clear that the moment an agreement to sell is executed between the parties and part consideration is received, the transfer for the purpose ....