TaxTMI 
TaxTMI 
2018 (1) TMI 1507
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....ushan & Others 1,00,000/- 2. 654.01 sq. mtr. Milan Infra Developers 1,83,12,280/- 3. 228.53 " Sushil Khurana & Kanchan Khurana 63,98,940/- 4. 228.53 " Janki Devi & Others 63,98,940/- 5. 208.81 " Vinayak Pushp Projects 55,12,584/- 6. 780.34 " Vinayak Pushp Projects 2,06,10,976/- 7. 243.30 " Murari Lai Agarwal & Pawan Kumar Agarwal 68,12,400/- 8. 238.80 " Manoj Jaiswal & Others 66,86,400/- 9. 94.62 " Nazrul Rehman Khan 23,06,400/- 10. 220.54 " Rukhsana Begum Khan 61,75,120/- 11. 205.68 " Krishna Kumar Pandey & Nitin Chugh 57,79,000/- 12. 228.53 " Ranjna Kakkar & Shruti Kakkar 63,99,000/- 13. 220.54 " Madhu Arora 61,75,120/- Total 11,370.23 Sq. Mtrs. Rs. 9,76,46,960/- 3. The assessee filed the return of income on 15th July, 2011 on an income of Rs. 8,32,23,870 claiming refund of Rs. 4,39,985. In the return of income, assessee disclosed (i) "Income from house property" at Rs. 2,863 (ii) "Long term capital gains" at Rs. 8,11,72,499 and (iii) "Income from other sources" at Rs. 40,64,754. The assessee disclosed the sale co....
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.... Rs. 19,07,79,830 on which an additional stamp duty of Rs. 1,33,07,900 was to be paid. Therefore, as per provisions of Section 50C, A.O. should have considered the value of the plot at Rs. 19,07,71,830 for computing long term capital gains. 3. The A.O. has not made any enquiry regarding income from house property declared at Rs. 2863. 4. The A.O. has not made any enquiry regarding income from other sources declared at Rs. 40,64,754. 4. The Ld. CIT issued show cause notice under section 263 on 19.11.2015 in compliance to which assessee made compliance and filed paper book. The Ld. CIT discussed each issue in the impugned order after considering the explanation of assessee. 5. The assessee explained before Ld. CIT that assessee disclosed long term capital gains in the return of income along with its computation. The assessee filed revised computation sheet along with revised capital gain chart and also filed revised return for assessment year under appeal by disclosing correct valuation on account of long term capital gains. The assessee raised an alternative contention before A.O. and correctly filed revised computation of income. The A.O. did not raise any o....
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....he value of the property should be considered which is adopted by the Stamp Valuation Authority. The Ld. CIT did not consider the judgment of the Hon'ble Supreme Court in the case of Sanjeev Lal v. CIT [2014] 365 ITR 389 relied upon by assessee in favour of the assessee. The Ld. CIT accordingly held that the revised return filed by assessee was non-est and that the sale consideration should be adopted according to Section 50C of the I.T. Act which is determined by Sub-Registrar, Allahabad at Rs. 19,07,79,830. The assessment order was accordingly set aside and A.O. was directed to compute long term capital gains by considering sale consideration as per Section 50C of the I.T. Act at Rs. 19,07,79,830. The A.O. was also directed to make proper enquiry regarding income from house property and income from other sources as disclosed by the assessee in the original return of income. 7. The Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that A.O. applied his mind to the facts of the case by examining the material on record. The assessment order remained subject to appeal before Ld. CIT(A), Allahabad which was however, dism....
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....order with due application of mind by considering the material on record, therefore, it is not a case where A.O. passed the order without making enquiry or verification. Therefore, Explanation to Section 263 would not apply in the case of the assessee. He has, therefore, submitted that impugned order may be set aside. 7.1 The Ld. D.R. on the other hand relied upon the impugned order and submitted that A.O. made the assessment on revised return of income filed belatedly on 1st July, 2013. The A.O. did not mention original return of income in assessment order. The A.O. has not mentioned the details of long term capital gains mentioned in the original return of income or revised return of income. Therefore, it is a case of no enquiry, therefore, Ld. CIT was justified in setting aside the same. 8. We have considered the rival submissions. It is not in dispute that assessee filed original return of income on 15th July, 2011 declaring long term capital gains. The assessee later on revised the return of income on 1st July, 2013 and declared NIL long term capital gains. Learned Counsel for the Assessee referred to various documents in the paper book. He has submitted that PB. 1-03 wh....
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....ideration of Rs. 1.32 crores. Out of this amount, the appellants received a sum of Rs. 15 lakhs by way of earnest money from the intending purchaser. The appellants purchased another house on April 30, 2003, within one year from the date of the agreement to sell. The validity of the will was questioned by another son of the deceased testator in a civil suit, wherein the trial court, by an interim order restrained the appellants from dealing with the house property. The suit was ultimately dismissed in May, 2004, and the validity of the will was upheld. The appellants executed the sale deed in 2004 and it was registered on September 24,2004. On the belief that the long-term capital gains were not chargeable to tax under the provisions of section 54 of the Income-tax Act, 1961, the appellants did not disclose the long-term capital gains in their return of income for the assessment year 2005-06. The Assessing Officer was of the view that the appellants were not entitled to any benefit under section 54 of the Act since the appellants had purchased the new house more than one year prior to the transfer of the original asset. The Commissioner (Appeals) dismissed the assessees' appeal....
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....imbhu Mehra considered the judgment of the Hon'ble Supreme Court (supra) and held in para-14 as under: "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 of section 50C takes place and computation under section 48 will start accordingly, for the purpose of calculating the capital gains under section 45. From the aforesaid, it is apparently clear that the transfer of the property took place in the year 2001 when the provision of section 50C was not in existence. Consequently, the Assessing Officer was not justified in making the reassessment and computing the capital gains by invoking the provision of section 50C, which was clearly not applicable in the assessees' case." 10. Considering the facts of the case and material on record, it is clear that there was an Agreement to Sale between Assessee-HUF and Shri Shanti Bhushan in September, 1966, whereby, the purchaser agreed to purchase the property for Rs. 1 lakh and paid earnest money of Rs. 5000 through cheque. It is, therefore, established on record that the purchase....
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....y an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer". The trouble, however, is that while the sale consideration is fixed at the point of time when agreement to sell is entered into, there is sometimes considerable gap in parties agreeing to a transaction (i.e. agreement to sell) and the actual execution of the transaction (i.e. sale deed), and yet, it is the value as on the date of execution of sale deed which is recognized by Section 50C for the purpose of computing the capital gain because that is what is relevant for the purpose of computing stamp duty for registration of sale deed. The very comparison between the value as per sale deed and the value as per stamp duty valuation, accordingly, ceases to be devoid of a rational basis because thes....
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....later similar provision inserted by way of section 43CA does take care of such a situation. 6.2 It is therefore proposed to insert the following provisions in section 50C: (4) Where the date of an agreement fixing the value of consideration for the transfer of the asset and the date of registration of the transfer of the asset are not same, the value referred to in sub- section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement (5) The provisions of sub-section (4) shall apply only in a case where the amount of consideration or a part thereof has been received by any mode other than cash on or before a date of agreement for transfer of the asset. [5] True to the work ethos of the current Government, it was the first time that within four months of the Tax Simplification Committee being notified, not only the first report of the Committee was submitted, but the Government also walked the talk by ensuring that the several statutory amendments, based on recommendations of this report, were introduced in the....
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....s provision shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, on or before the date of the agreement for the transfer of such immovable property. 30 These amendments are proposed to be made effective from the 1st day of April, 2017 and shall accordingly apply in relation to assessment year 2017-18 and subsequent years. [7] While the Government has thus recognized the genuine and intended hardship in the cases in which the date of agreement to sell is prior to the date of sale, and introduced welcome amendments to the statute to take the remedial measures, this brings no relief to the assessee before me as the amendment is introduced only with prospective effect from 1st April 2017. There cannot be any dispute that this amendment in the scheme of Section 50C has been made to remove an incongruity, resulting in undue hardship to the assessee, as is evident from the observation in Easwar Committee report to the effect that "The (then prevailing) provisions of section 50C do not provide any r....
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....f related payments, even when the corresponding income is duly brought to tax. That will be going much beyond the obvious intention of the section. Accordingly, we hold that the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April. 2005. being the date from which sub-clause (ia) of section 40(a) was inserted by Finance (No.2) Act, 2004." (8) Their Lordships were pleased to hold that this reasoning and rationale of this decision "merits acceptance". The same principle, when applied in the present context, leads to the conclusion that the present amendment, being an amendment to remove an apparent incongruity which resulted in undue hardships to the taxpayers, should be treated as retrospective in effect. Quite clearly therefore, even when the statute does not specifically state so, such amendments, in the light of the detailed discussions above, can only be treated as retrospective and effective from the date related statutory provisions was introduced. Viewed thus, the proviso to Section 50C should also be treated as curative in nature and with retrospective effect from 1st April 2003, i....
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....od inserted. This is how the question of retrospectivity arose in Allied Motors (P.) Ltd. (supra). This Court, in Allied Motors (P.) Ltd. (supra) held that when a proviso is inserted to remedy unintended consequences and to make the section workable, a proviso which supplies an obvious omission in the section and which proviso is required to be read into the section to give the section a reasonable interpretation, it could be read retrospective in operation, particularly to give effect to the section as a whole. Accordingly, this Court in Allied Motors (P.) Ltd. (supra), held that the first proviso was curative in nature, hence. retrospective in operation w.e.f. 1st April. 1988. It is important to note once again that, by Finance Act, 2003, not only the second proviso is deleted but even the first proviso is sought to be amended by bringing about an uniformity in tax, duty, cess and fee on the one hand vis-a-vis contributions to welfare funds of employee(s) on the other. This is one more reason why we hold that the Finance Act, 2003, is retrospective in operation. Moreover, the judgment in Allied Motors (P.) Ltd. (supra) is delivered by a Bench of three learned Judges, which is bin....
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....partial sale consideration was received through banking channels, the Assessing Officer, so far as computation of capital gains is concerned, will adopt stamp duty valuation, as on 29.6.2005, of the property sold as it existed at that point of time. In case the assessee is not content with this value being adopted under section 50C, he will be at liberty to seek the matter being referred to the DVO for valuation, again as on 29-6-2005, of the said property. As a corollary thereto, the subsequent developments in respect of the property sold (e.g. the conversion of use of land) are to be ignored. It is on this basis that the capital gains will be recomputed. With these directions, the matter stands restored to the file of the Assessing Officer for adjudication de novo, after giving 5" opportunity of hearing to the assessee and by way of a speaking order. I order so. (10) As I part with the matter, I may make one more observation. The amendment in Section 50C was brought in to provide relief to the assessee in a situation in which the stamp duty valuation of a property has risen between the date of execution of agreement to sell and execution of sale deed, as is the nor....
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....was a non est return, if assessment is framed on non est return, the assessment itself would be null and void and could not be subject matter of jurisdiction under section 263 of the I.T. Act. In support of his contention, he relied upon the decision of the ITAT, Mumbai Bench in the case of Westlife Development Ltd. (supra) in which original assessment order was held to be null and void in the eye of Law as same was passed upon non-existing entity. Therefore, it was held that Ld. CIT could not have assumed jurisdiction under the Law to make revision of a non est order. Therefore, impugned order passed under section 263 by the Ld. CIT was also held invalid in the eye of Law and therefore, the same was quashed. The A.O. in this case has framed the assessment on the basis of revised return filed on 1st July, 2013 and taken the income from the same for computing the total income of assessee. It is also case of the Revenue that even the A.O. did not mention original return of income in the assessment order, therefore, even if it is considered that revised return dated 1st July, 2013 which is basis for completing the assessment in question was non est, then the entire assessment would vi....