TaxTMI 
TaxTMI 
2024 (5) TMI 219
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....cer [AO] that he entered into development agreement with M/s. Indo Asian Buildcon Pvt. Ltd. [hereinafter referred to as the "company"] on 23.03.2016 with respect to the land (Gut No. 274) at Dhakne as plot Nos. 1 to 39, admeasuring 14,000 Sq.mtr & delivered possession for development and construction over the land for the consideration (compensation) of Rs.2,51,000/-. The said land was earlier purchased by the appellant assessee vide purchase agreement dated 29.11.2013 for the consideration of Rs.20,00,000/- (AO has shown as 21,00,000/-). The AO found that the government valuation/stamp duty valuation was stated to be Rs.1,66,60,000/- and stamp duty of Rs. 5,00,000/- along with registration fee of Rs.30,000/- was paid for this transaction by the appellant assessee, hence, added short-term capital gain of Rs.1,45,60,000/- in his total income for the relevant AY 2016-17. On being aggrieved by the impugned order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), vide order dated 02.08.2023, confirmed the aforesaid additions made under the assessment order, hence this appeal. 3. The main grounds under appeal read as under: "1. In the facts and circumst....
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.... for development and construction work etc.. The capital gain could not have been added in the total income of the appellant for the relevant AY. Further submitted that section 50C of the Act is not applicable in the facts of the present case. Prayed to delete the addition of capital gain from the income of the appellant assessee for the relevant A.Y. 2016-17 and to set aside the impugned order. 8.1 Ld. Representative for the appellant assessee has referred consolidated order dated 16.09.2016 passed by ITAT, Mumbai in ITA No. 5330/Mum/2009 & ITA No. 5331/Mum/2009, Voltas Ltd. Mumbai V. ITO WD 7(3)(4), Mumbai & ITA 5320/Mum/2009, ITO WD 7(3)(4) Mumbai V. Voltas Ltd. Mumbai. The relevant Para 3.11 reads as under: 3.11 ................................................."Since the impugned capital asset transferred by the assessee upon which long term capital gain has been computed by the AO is on account of transfer development rights in the land of the assessee. The land itself has not been transferred by the assessee. Thus, in our opinion provisions of section 50C has been wrongly applied upon the impugned transaction....................................." 8.2 The appell....
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....ndivali(W), Mumbai, wherein the Ld. Tribunal has held in relevant Para 10 of its order as under: "10......................................................Thus, the land which was sold during the previous year by the assessee, thus keeping in view our above discussions in the light of facts and circumstances of the case, was a capital asset within the provisions of Section 2(14) of the Act and the valuation of the land as per stamp duty valuation authorities as per section 50C of the Act was rightly adopted by the AO as full value of consideration............................................, 9.2 The Ld. DR has also referred order dated 31.05.2016 passed by the Mumbai bench of this Tribunal in ITA No. 5038/Mum/2010 the Income-tax Officer, Ward 21(1)(1), Mumbai v. Bharat Raojibhai Patel, wherein the Ld. Tribunal has held as under: "12. In view of the above proposition of law and the facts of the case, we are of the view that in the present case what was transferred by the assessee was development rights in respect of the property. On the plot of land owned by the assessee in co-ownership, which was subject matter of development agreement, certain area of construct....
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.... agreement at Rs. 34.36 lacs which is the total area of 3776 sq. Ft. as attached in the agreement. Accordingly, the market value of 224 sq. Ft. is Rs. 2,03,830/- only. In view of the above, we are of the view that the value declared in agreement (including all transaction) will be higher than the stamp duty valuation ..................................................................." 10. The main foundation of the argument of the assessee in the instance case is that he was the director of the said company and the said land was purchased by him through registered deed dated 29.11.2013. A perusal of this deed shows that the said land was purchased from about 10 persons on the name of the appellant assessee as sole vendee for the consideration of Rs. 20,00,000/-(AO has shown Rs. 21,00,000/-). According to Para 4 of the registered deed, it transpires that the consideration was paid by the company through different cheques to the different vendors to the extent of their shares in the respective piece of land but does not contain any citation in the deed that the said land was purchased on behalf of the company only 11. The English translation copy of registered development agree....
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....ity of section 50C of the Act has to be examined. The relevant part of the section reads as under: "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 a [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. ..............................................................."' 14. The consideration (compensation) of Rs. 2,51,000/-, shown in the development agreement dated 23.03.2016, is apparently, far less than the value of Rs. 1,66,60,000/- as endorsed on the face of agreement, which is assessed by the state valuation authority. The facts of M/s Dattan Development and Bharat Raojibhai Patel were decided by the coordinate benches of this tribunal, are similar to the facts of the instant appeal....