TaxTMI 
TaxTMI 
2026 (8) TMI 684
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....ion of assessee that the provisions of section 43CA cannot be applied to substitute the actual sale consideration with the stamp value in the previous year relevant to AY 2012-2013 when the sale agreement was made and part payment was received by cheque. It has further erred in upholding the action of AO in applying the DLC rate applicable for individual plots for entire 6.690 hectare land which equals to 66,900 sq. mt.without appreciating the fact that plotting cannot be made on the entire land and 50% of the land is required to be left for roads & facilities for plotting in the land. 2. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs. 1,88,77,925/- in respect to sale of 2.7935 hectare agricultural land situated at Madrampura, Sikarpura, Vatika, Sanganer, Jaipur by applying the provisions of section 43CA of IT Act, 1961 which came in force w.e.f. 01.04.2014 by Finance Act, 2013 by not accepting the contention of assessee that the provisions of section 43CA cannot be applied to substitute the actual sale consideration with the stamp value in the previous year relevant to AY 2012-2013when the sale agreement was made and part payment was r....
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....00/- Rs. 1,88,77,925/- and Rs. 1,13,33,450/- with respect to the three lands sold by the assessee during the year. 4. The orders of the Authorities below reveal the facts of the case as the assessee being a private limited company engaged in the business of Development and Trading of lands and plots. During the impugned the assessee was noted to have sold three pieces of land to M/s Aristocratic Ventures LLP for a consideration of Rs. 2.85 crores. The AO noted from the details and documents filed before him, that the agreement was executed on 27.06.2011 between the assessee and M/s Aristocratic Ventures LLP for sale of the above properties as per which the total consideration was decided of Rs. 3.01 crores and advance of Rs. 2.41 crores was taken by the assessee through RTGS. The agreement stated in the case of failure to make payment within six months from the date of agreement, the sale consideration would be Rs. 2.85 crores instead of Rs. 3.01 crores. The sale deeds for these properties were registered during the impugned year for a total consideration of Rs. 2.85 crores. The AO invoked Section 43CA of the Act, to the impugned transaction as per which, the stamp duty value of....
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....the statute w.e.f. AY 2014-15. ii) That the stamp duty value considered by the AO was not correct, since the AO had adopted the stamp duty value on abadi land while two of the lands which were sold were agricultural lands and the one of the land sold had not even been plotted for abadi purposes. iii) That since the assessee had objected to the stamp duty value adopted by the AO, he was duty bound to refer the valuation of the fair market value of the land sold to the DVO, which the AO had not done in the facts of the present case. 8. The Ld. CIT(A) rejected all the contentions raised by the assessee and accordingly, confirmed the addition made by the AO. Aggrieved by which the assessee has come up in appeal before us. 9. The ld. Counsel for the assessee reiterated the arguments made before the Ld. CIT(A), while the Ld. DR relied on the order of the AO and in support of the findings of the Ld. CIT(A). 10. We have heard both the parties. We shall first deal with the contention raised by the ld. Counsel for the assessee before us, that the provision of Section 43CA of the Act were not applicable in the facts of the present case. 11. The contention of the ....
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....ipur (11.06 Bigha) for sale consideration of Rs. 78,00,000/- 3) Land at village Keshawala, Muhana, Sanganer, Jaipur (2.7819 Bigha) for sale consideration of Rs. 20,00,000/- 6.1.4 The provisions of section 43 CA which was inserted by the Finance Act, 2013, w.e.f. 1-4-2014 are as under: 43CA. (1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than 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 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 computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) The provisions of sub-section (2) and sub-section (3) of section 50C shall, so far as may be, apply in relation to determination of the value adopted or assessed or assessable under sub-section (1). TAX DEP (3) Where the date of agreement fixing the value of consideration for transfer of the ....
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....fer on the date of the agreement, takes care of possible grievances and hardship that could arise on account of date of agreement fixing the value of consideration for transfer of the asset being different from the date of registration of such transfer. From a plain reading of the section, it is clear that the statute has factored in the possible differential in dates of agreement versus date of execution of sale deed, which leads to the inevitable conclusion that the date of transfer as per Section 43CA is the latter date i.e. date of registration of sale deed. 6.1.6 This correctness of this stand is highlighted by the judgement of the jurisdictional ITAT Jaipur Bench in 'A' SpytechBuildcon v. ACIT, Circle-6, Jaipur [2021] 129 taxmann.com 175 (Jaipur Trib.). In this case the Assessee-firm was engaged in business of real estate development and during relevant previous years sold three flats at value less than Fair Market Value as on date of registration of sale deed. The Assessing Officer proposed to make addition under section 43CA on differential amount of consideration shown in document and Stamp Duty Valuation whereas Assessee contended before Assessing Officer....
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....n 43CA is found to be non-maintainable and is dismissed. 14. Referring to the same, he pointed out that the Ld. CIT(A) had relied on the decision of the ITAT Jaipur Benches in the case of M/s Spytech Buildcon (Supra) in support of his decision that the provision of Section 43CA of the Act were applicable in the facts of the present case, since the transfer of asset by the assessee, which primarily attracted the provisions of Section 43CA of the Act, was effected in the impugned year itself. 15. Considering the averments made by both the parties as above, and on going through the decisions relied upon by both the sides, we find merit in the contention of the ld. Counsel for the assessee that the provisions of Section 43CA of the Act were not applicable in the facts of the present case. 16. As noted above, that the transfer of the three pieces of land was initiated through an agreement to sell on 27.06.2011 wherein the consideration was fixed at Rs. 3.01 crores and Rs. 2.47 crores had been received in advance by RTGS i.e. by modes other than the cash. It was agreed between the parties that if the balance consideration is not paid within six months then the consideration woul....
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....egistration Authorities on 11.10.2004 when the provisions of Section 50C were there on the statute having been inserted by Finance Act 2002 w.e.f. 01.04.2003. However, the agreement to sell the property was entered way back in August 2001, but due to disputes created by the persons who claimed to be heirs of the seller of the property, i.e. the assessee, the sale could not be completed immediately and after settling all disputes the sale deed was registered in October 2004. In the facts of the said case also, it was argued that when the agreement to sell was entered into, which was ultimately acted upon and culminated into the registered sale deeds, the provisions of Section 50C were not on the statute, and therefore, the provisions could not be invoked in the case of the assessee. 20. It was argued that the transaction was actually entered into when the agreement to sell was entered and was completed on another date and if there is a change in law in the intervening period then the subsequent amendment will not change the character of the transaction and the law that existed at the time of entering into the transaction would prevail over the amendments subsequently made. The IT....
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....ging section is not relevant under the peculiar facts and circumstances of the case. 8.11 In view of the foregoing discussions and on consideration of the facts and circumstances of the case and legal propositions discussed in the preceding paras, we are led to d to the logical conclusion that the provisions of s. 50C should not be made applicable to these assessee's and we order accordingly. .................. 21. The Ld. CIT(A) has relied on a contrary decision of the ITAT Jaipur Benches in the case of M/s Spytech Buildcon (Supra). We have gone through the said decision and we find that the same is distinguishable on the facts. In the facts of the said case, the assessee had failed to establish that the sale consideration was received through account payee cheques on the date of entering into the agreement to sell. The ITAT held the provisions of Section 43CA of the Act to be applicable noting that the entire sale consideration was not paid through account payee cheques at the time of entering into agreement to sell. The findings in this regard are contained at page 9 of its order as under:- ........ The transfer under the provisions of sect....
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....o AY 2012-13 when the new law was come in force. The assessee was noted to have paid the purchase consideration at the time of entering into agreement to sell and it was contended that the purchase was de facto completed except for the formality of registration. The ITAT, we have noted, found merit in the plea of the assessee noting that, in the impugned year before it, the assessee had only registered the agreement which already stood executed in the earlier years and the substantial application had also been discharged and substantive right had accrued to the assessee therefrom. It was accordingly held that pre-amended provisions would apply. The issue is discussed at para 6 and 7 of the order as under:- ....... 6. We have carefully considered the rival submissions on the issue. In the instant appeal, the applicability of Section 56(2)(vii)(b) of the Act as amended by Finance Act, 2013 and applicable to AY 2014-15 in question. On a perusal of pre-amended provisions of Section 56(2)(vii)(b) of the Act, we gather that where an individual or HUF receives from any person any immovable property without consideration, the provisions of pre-amended Section 56(2)(vii)(b....