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TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1455
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....se to public advertisement in July 2003 and was approved by the Honorable Bombay high court on 1-10-2004 considering the same to be in interest of the beneficiaries of Appellant trust. In the circumstances the Assessment order passed by the Learned Assessing Officer is liable to be set aside. 2. The Commissioner of Income Tax (Appeals) erred in confirming the addition U/s 50C on the basis of ova report obtained determining fair market value as at date of registration of agreement i.e. 10-8-2010 without appreciating that the Memorandum of intent (Mal) to sale the property was already entered into 18-12-2003 when the transaction price was finalised and for which separate ova report was also obtained to determine fair market value on the date of Mal and therefore addition if any had to be based on the fair market value determined on the date of Mal. 3. The Commissioner of Income Tax '(Appeals) erred in confirming the addition U/s 50C on the basis of ova report obtained determining fair market value as at date of registration of agreement i.e. 10-8-2010 without appreciating that the said ova report was based on incorrect facts and presumptions' drawn without any basis. 4.....
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....-, whereas the stamp value of the said land is or Rs. 11.76 Crore. The assessee was also show caused as to why the provisions of section 50 C be not invoked. The assessee filed its reply dated 31.03.2013. in the reply the assessee contended that the stamp valuation authority has value the land at the current rate, however, the property was conveyed at the price agreed in 2003 and the consideration under the sale agreement was approved by Hon'ble Bombay High Court. The assessee trust was set up vide Wakf deed dated 19.04.1929. And as per clause 14 of the Trust deed the properties owned by the assessee cannot be transferred without the consent of Bombay High Court. The assessee owned several properties in and around Mumbai. The assessee trust entered in Memorandum of Intend for sale of piece of land at Village Tungwa, Kurla which was encroached by slum devellers with M/s Essa Associate on 18.12.2003. As per clause 14 in the Trust deed the assessee filed petition before Bombay High Court for approval of sale of land. The Bombay High Court granted permission to sale the said land and the agreement to sale was registered on 10.08.2010 and the stamp duty was paid on the current market va....
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.... the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. Ground No.1 to 3 relates to invoking the provision of section 50C of the Act. The ld. AR of the assessee submits that the assessee is a Private Family Discretionary Trust settled by Sir Mohammed Yusuf in 1929. The Trust is registered as per the provision of Mohammedan Law. The certain provision of trust was amended in pursuance Hon'ble Bombay High Court order and decree dated 19.02.1952 passed by in Suit No. 1286 of 1951. During the assessment proceeding, the assessee submitted the computation of LTCG earned on sale of land and declared LTCG. The assessee-trust was in possession of certain right in the land which was in the name of assessee. However, the assessee was not in possession. The land was encroached by unauthorized occupant/hutments. There were other certain part of land in which even as per land record, the name of assessee was not appeared. Therefore, the assessee trust was not having clear and marketable title over the said land nor the assessee was in possession. The assessee trust issued a public notice for inviting bids for sale of their rights in the....
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.... on 10.08.2010 for sale of rights in land of 4 Acre and 11 Gunta as stated above. 6. The ld. AR of the assessee further submits that the provision of section 50C have no application as the assessee has transferred only right in the land which would not be equated to land or building or both as per the language of section 50C of the Act. The ld. AR of the assessee submits that the reference of section 50C is not absolute but subject to certain condition, which is mentioned in sub-section (2) of section 50C. The land under reference was not having clear title and many claims were there. The ld. AR of the assessee submits that the right in the said land cannot be described as capital asset which can be described as "land & building or both" then section 50C would seize to apply. The Fair Market Value of the right was ascertained by the assessee on the basis of highest bidder of the participants received by assessee, which was duly approved by Hon'ble Bombay High Court accepted and granted the approval. The Assessing Officer is under obligation to accept the same as correct. Section 50C was bring to curve the black money and not for the genuine transaction. In support of his submissio....
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.... 10. We have gone through the various documentary evidences filed by the assessee. From the documentary evidences we have seen that the assessee issued a Public notice for sale of the piece of land (page 145 of PB). In the said notice the assessee clearly mentioned that the land under offer for sale is encroached wrongfully. It was also published that the title of the land is also not perfect. In response to the notice the assessee received bid from M/s Essa Associate. The bid of Essa Associate was accepted by the trusty of the assessee and executed MOI date 18.12.2003. The perusal of the MOI dated 18.12.2003 reveals M/s Essa Associate agreed to acquire the piece of land from assessee on " as is where is" basis. It is clearly mentioned in clause 'D' at page 3 of the said MOI that it is impossible to define and determine the exact area of non- acquired land at that stage until the purchaser actually succeeded in clearing and perfecting title of the owner's title. Further, vide clause '5' on page 5 of the said MOI, the purchaser was allowed to act in a lawful manner in clearing the title of the owner on the encroached upon land and /or wrongfully deleting the title of the owner( ass....
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....g in which it occurs. A fair and reasonable construction of section 52(2) would be to read into it a condition that it would apply only where the consideration for the transfer is understated or, in other words, the assessee has actually received a larger consideration for the transfer than what is declared in the instrument of transfer and it would have no application in case of a bona fide transaction where the full value of the consideration for the transfer is correctly declared by the assessee. Accordingly, if the revenue seeks to bring a case within section 52(2), it must show not only that the fair market value of the capital asset as on the date of the transfer exceeds the full value of the consideration declared by the assessee by not less than 15 per cent of the value so declared, but also that the consideration has been understated and the assessee has actually received more than what is declared by him. There are two distinct conditions which have to be satisfied before sub-section (2) can be invoked by the revenue and the burden of showing that these two conditions are satisfied rests on the revenue. This burden may be discharged by the revenue by establishing facts an....
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....legal position as held by superior courts in K. P. Varghese (supra) by Hon'ble Apex Court, Hon'ble Delhi High Court in CIT Vs Khoobsurat Resort (supra) and the coordinate bench of the Tribunal in Smt D. Anita (supra) and the undisputed fact that when the land under sale was having encumbrances the adoption of stamp valuation as a sale consideration by applying the provisions of section 50C was not justified by assessing officer, in absence of any evidence that the sale consideration was more than the value shown in the MOI. Therefore, we direct the assessing officer to work out the capital gain on the basis of consideration shown by the assessee. In the result the grounds No. 1 to 3 of the appeal are allowed. No contrary decision is brought to our notice. The contention of the ld. DR for the revenue has no force that the assessee has raised new grounds of appeal before this Tribunal. The sum and substance of the grounds of appeal raised by the assessee before the lower authorities and before the Tribunal is the same. 16. Ground No. 4 relates to treating the income in AY 2010-11 instead of AY 2011-12. Since we have granted relief to the assessee on grounds No. 1 to 3, therefore, th....