TaxTMI 
TaxTMI 
2020 (12) TMI 780
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....ncome of Rs. 18,31,130/- as determined by the Assessing Officer. The assesee-company by virtue of two agreements dated 25.12.2011 with the builder was allotted two flats bearing no. 1101 and 1201 in Orange County Project at Ghaziabad. The possession of the said flats was to be handed over by the builder to the assessee-company in the month of April/May, 2012. Just before the date of handover over the possession, the assessee-company transferred the right to purchase the said two flats to Mr. Deepak Jain and Nr, Deepak Mahajan by means of self-made affifavits. During the course of assessment proceedings, the assessee-company failed to furnish any agreement for the said transfer. The only document produced by the assessee in this regard was self-made affidavits, wherein the consideration for transfer of flats was not mentioned. The assessee-company, therefore, was required by the Assessing Officer to show-cause as to why the capital gain arising from the said transfer of flats should not be computed by invoking the provisions of section 50D of the Act. In this regard, it was explained on behalf of the assessee-company that even though only terms and conditions of transfer were mentio....
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....ortant to contemplate the meaning of the provision under section 50D with its intended purpose of insertion vide the Finance Bill, 2012. A bare reading of the section 50D, as inserted with effect from the lS1 day of April, 2013, is as follows- "50D. Fair market value deemed to be full value of consideration in certain cases.-Where the consideration received or accruing as a result of the transfer of a capital asset by an assessee is not ascertainable or cannot be determined, then, for the purpose of computing income chargeable to tax as capital gains, the fair market value of the said asset -on the date-of transfer shall be deemed to be the full value of the consideration received or accruing as a result of such transfer.". As per the Finance Bill of 2012, relating to direct taxes seeking to amend the Income-tax Act, the following insertion was proposed (pertaining to section 50D); Extract from the Memorandum explaining the provision (s_ 50D) in the Finance Bill, 2012: "FAIR MARKET VALUE TO BE FULL VALUE OF CONSlDERATION IN CERTAIN CASES Capital gains are calculated on transfer of a capital asset, as sale consideration minus cos....
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....ated 11.04.2012 of Deeptak Jain and transfer affidavit to builders on 11,04.2012 1101 Mr. Deepak Mahajan, s/o Mr. Sudesh Kr. Mahajan, resident of B-22, Sita Shree Aptt., sectgor-14, Rohini, Deli-110085 Rs. 48,59,000/- (by virtue of affidavit dt. 20.05.12 of Deepak Mahajan and transfer affidavit to builders on 20.05.12. It is further submitted that the assessee received total consideration amount of Rs. 1,01,44,185/- (Rs. 52,85,185/- + Rs. 48,59,000/-j against transfer rights and claimed short term capital gains to the tune of Rs. 2,65, 942/- after deducting the amount ojR-;98, 78,243/- (Rs.S7,20,789/- + Rs. 41,S8,374/- paid for booking of flats (Extract of I. T Return for the relevant year herewith and marked as Annexure: 'B'). It is important to emphasize at this juncture that the Ld. AO. has made a self-contradictory observation in his order wherein on Page - 2 he mentions: "During the course of hearing, the AR. of the assessee company produced the books of accounts along with other requisite details which have also been perused and verified on test check basis. He also furnished other details/ document' which have also been perused and exam....
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....mply evident from his order. The jurisdiction and applicability of s. 50D is clearly ousted and hence, has been wrongly invoked by the Ld. AO. As far as the applicability of s. 50C is concerned, it is humbly stated that numerous judgments have clarified the position of law so far as the transfer of rights in a flat is concerned. The ITAT 'B' Bench of Ahmedabad Tribunal in ITA No.2519/Ahd/2009 order dated 13.04.2012 in the case of Income Tax Officer vs. Silri Yasin Moosa Godil, -under similar facts and circumstances at para-16 held as follows: - "16. From the readrng of Sec. Soc, It IS evident that Sec. 50C is a deeming provision and It extends to only to land or building or both. Section 50C can come into play only m a situation where the consideration received or accruing as a result of the transfer by an appellant of a capital asset, being land or both IS less than the value adopted or assessed or assessable by any authority of state Government therefore for the purpose of payment of stamp duty in respect of such transfer It is settled leg 1 proposition that deeming provision can be applied only in respect of the situation specifically given and hence ca....
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....ssment order framed in the light of the materials available on record before the assessing officer during the assessment proceedings. The AO has already discussed the issue in detail while passing the order in the matter I agree with the view as taken by the AO in the matter. Keeping in view of the facts as mentioned above, in the absence of any cogent material evidence, I do not find any infirmity in the order of the assessing officer and the same is hereby upheld. Ln view of the above, this ground of appal is dismissed". 6. The ld. Counsel for the assessee mainly reiterated before us the submissions made on behalf of the assessee before the ld. CIT(Appeals) on this issue. He submitted that even though the consideration for transfer of two flats in question was not specifically mentioned in the affidavits filed by the asseesee-company, the copies of account of the transferees were furnished by the assessee-company before the Assessing Officer during the course of assessment proceedings showing the agreed sale consideraetion for flat no. 1101 and 1201 at Rs. 49,59,000/- and Rs. 52,85,185/- respectively. He also submitted that the sale consideration so agreed between the assesese....