TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 271
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.... The AO brought this difference as additional capital gain by invoking the provisions of section 50C of the Act. 4. The assessee has filed application for admission of the additional evidence of the copy of Cash Book statement for the period 1.4.2016 to 31.3.2017 and the following documents: Sl. No. Description 1 The Copy of the Income Tax Returns for the Assessment Year 2015-16 along with Statement of Income. 2 The Copy of the Income Tax Returns for the Assessment Year 2016-17 along with Statement of Income. 3 The Copy of the Balance Sheet and Profit and Loss Account for the Assessment Year 2015-16. 4 The Copy of the Loan Ledger Statement for the relevant for Period. 5 The Copy of the Bank Account of Vijaya Bank for the Assessment Year 2015-16 along with Statement of Income. 6 The Copy of the Agreement For Sale dated 03.06.2013 between Basavaraj and Raghavendra. 7 The Copy of the SaleDeed dated 23.11.2015 between Basavaraj and Raghavendra. 5. In the application under Rule 29 of the Appellate Tribunal Rules, 1963 the assessee has submitted that due to inadvertence the above documents were not filed before the lower authorities and prayed for admission of t....
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....n place in the previous year relevant to Assessment Year 2010-11, the capital gain in question cannot be brought to tax in Assessment Year 2011-12. This aspect has been accepted by the AO in the order of assessment. Because the assessment for Assessment Year 2010-11 was barred by time and could not be reopened, he resorted to the provisions of Sec.50C of the Act and taxed deemed accrued capital gain. Section 48 of the Act lays down that capital gain has to be computed by reducing from the full value of consideration received or accruing as a result of transfer expenditure incurred wholly and exclusively in connection with such transfer and the cost of acquisition of the asset and the cost of improvement if any. Sec.50C of the Act is a Special provision for full value of consideration certain cases and it lays down that where the consideration received or accruing as a result of the transfer by 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 ....
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.... accompanied by a set of provisions for computing the income subject to that charge. The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section. Otherwise one would be driven to conclude that while a certain income seems to fall within the charging section there is no scheme of computation for quantifying it. The legislative pattern discernible in the Act is against such a conclusion. It must be borne in mind that the legislative intent is presumed to run uniformly through the entire conspectus of provisions pertaining to each head of income. No doubt there is a qualitative difference between the charging provision and a computation provision. And ordinarily the operation of the charging provision cannot be affected by the construction of a particular computation provision. But the question here is whether it is possible to apply the computation provision at all if a certain inter....
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....ansfer." The provisions were amended by the Finance Act, 2009 w.e.f 1-10-2009 by adding the word "Assesseable" after the word adopted or assessed. After the amendment with effect from 1st October, 2009 the provision of Section 50C stood as follows: "Special provision for full value of consideration in certain cases. 50C.(1) Where the consideration received or accruing as a result of the transfer by 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 case of the assessee was that the provision of Section 50C has no manner of application because on the date when he received the money by way of sale proceeds neither the deed of conveyance had been executed and naturally it could not have been registered on that date. The Hon'ble Calcut....
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....n is claimed to have been made over on the basis of the agreements for sale in accordance with s.2(47)(v) quoted above. Designs to evade tax cannot be permitted. The Assessing Officer on the date of assessment for the assessment year 2006-2007 had before him the valuation made by the State for the purpose of stamp duty and rightly applied the same." 12. The aforesaid decision is not applicable to the facts of the present case as there was no device adopted by the Assessee to ensure that provisions of Sec.50C of the Act were not applicable to his case. Secondly, the registration was completed in the case before the Hon'ble Calcutta High on 27.11.2007 i.e., in AY 2008- 09 but the case before the Hon'ble Court related to AY 2006-07. The Court was interpreting the term "assesseable" and countered the contention of the Assessee that prior to the amendment of Sec.50C of the Act w.e.f 1-10-2009, it is only cases where the valuation is completed in the relevant AY that provisions of Sec.50C of the Act can be applied. In the present case, no such devise to evade tax has been pleaded by the revenue nor a plea has been taken by the Assessee that sale having taken place earlier to the execut....
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....ision rendered by Jaipur Bench in the case of Smt. Sita Bai Khetan Vs. ITO (ITA No.823/JP/2013 dated 27.7.2016), the Tribunal has held that the difference between the value adopted by stamp valuation authority and actual consideration is to be ignored as the same is less than 10%. For the sake of convenience, we extract below operative portion of the order passed by Mumbai bench. "We have heard the rival submissions and perused the orders of the authorities below and the case law relied on. Considering the entire facts of the assessee's case, the submissions of the assessee cannot be ignored. The sale consideration of these two plots sold on the same day though be separated agreements, is more than the stamp duty valuation by Rs. 3,00,00,000/-. Even assuming for a movement that the sale consideration in respect of Plot in survey No. 22 and 42 is less than the stamp valuation it is Rs. 33,48,284/- which is less than 10% of the stamp duty valuation of the said plot. Therefore, in view of the ratio of the decisions relied on by the assessee, the assessee should succeeded in its appeal. The Jaipur Bench in the case of Smt. Sita Bai Ketan (Supra) held as under:- "4.2 We have heard....
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.... third proviso in section 50C(1) of the Act, as per which the difference in stamp duty valuation and actual consideration should be ignored, if it is less than 5%/10%. Even though the said provision has come into effect from 1.4.2019/1.4.2021, we notice that the Kolkata Bench of Tribunal has held it to be curative in nature in the case of Chandra Prakash Jhunjhunwala (supra) and accordingly held that the proviso shall apply since the date of insertion of sec.50C of the Act. Accordingly, the above said reasoning given by the Kolkata bench of ITAT also supports the contentions of the assessee. 11. In view of the foregoing discussions we find merit in the prayer of the assessee. We notice that the addition of Rs. 15,92,800/- sustained by Ld CIT(A) works out to less than 10% of the actual consideration of Rs. 2,33,00,000/- paid by the assessee. Accordingly, we modify the order passed by Ld. CIT(A) and direct the A.O. to ignore the difference between fair market value determined by CIT(A) and the actual consideration as the same is less than 10% of the actual consideration. 12. In the result, the appeal filed by the assessee is allowed." 8. On the other hand, the ld. DR submitted t....