Just a moment...

Report
FeedbackReport
Bars
×

By creating an account you can:

Logo TaxTMI
>
Feedback/Report an Error
Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
TMI Blog
Home / RSS

2009 (2) TMI 235

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n of the conveyance deed, the valuation under the Bombay Stamp Act was made at Rs. 78,41,500 in respect of the one flat and Rs. 72,81,456 in respect of the second flat. There is no dispute about the fact that assessee company accepted valuation made by the Registrar/Sub-Registrar for the purpose of the payment of the stamp duty for registration of the deed of conveyance. The assessee filed the return of income which was selected for scrutiny. The assessee company had shown profit on sale of said flats as business income and the AO has also accepted same. In respect of the sale of the two flats, the AO was of the opinion that as the valuation made for the purpose of the stamp duty was more than the sale consideration shown in the sale deeds, hence, in view of the provisions of s. 50C of the Act, the valuation adopted for the purpose of the stamp duty should be treated as the sale consideration. The AO, therefore, made the addition of Rs. 51,22,956 that was the difference between valuation adopted for the purpose of the stamp duty and actual sale consideration shown by the assessee. The assessee carried the issue before the learned CIT(A), but did not find favour. 4. We have heard t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-s. (1), where- (a) the assessee claims before any AO that the value adopted or assessed by the stamp valuation authority under sub-s. (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed by the stamp valuation authority under sub-s. (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, Court or the High Court,  the AO may refer the valuation of the capital asset to a valuation officer and where any such reference is made, the provisions of sub-ss. (2), (3), (4), (5) and (6) of s. 16A, cl. (i) of sub-s. (1) and sub-ss. (6) and (7) of s. 23A, sub-s. (5) of s. 24, s. 34AA, s. 35 and s. 37 of the WT Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the AO under sub-s. (1) of s. 16A of that Act. Explanation: For the purposes of this section, 'valuation officer' shall have the same meaning as in cl. (r) of s. 2 of the WT Act, 1937 (27 o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rgeable under the head 'Capital gains' shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely: (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the asset and the cost of any improvement thereto: Provided that in the case of an assessee, who is a non-resident, capital gains arising from the transfer of a capital asset being shares in, or debentures of, an Indian company shall be computed by converting the cost of acquisition, expenditure incurred wholly and exclusively in connection with such transfer and the full value of the consideration received or accruing as a result of the transfer of the capital asset into the same foreign currency as was initially utilised in the purchase of the shares or debentures, and the capital gains so computed in such foreign currency shall be reconverted into Indian currency, so, however, that the aforesaid manner of computation of capital gains shall be applicable in respect of capital gains accruing or arising from every reinvestment thereafter in, and sale of, sha....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ceding previous year to such previous year, by notification in the Official Gazette, specify in this behalf." 9.2 It is well-settled principle of interpretation that the function of the Court is only to explain and not to legislate any provision of statute. The judicial function is confined to find out the true intention of the legislature behind provision brought on statute book. When the words of any statutory provision are clear and unambiguous, in that case to find out intention of the legislature need no further investigation by resorting to process of interpretation. Then the words used by the legislature should be the base to interpret a particular provision. On many occasions the provisions are drafted in such a way that they may create confusion when the same are being tried to apply and in such situation there is no option but to go with process of interpretation. What is the correct meaning of those words when the law or particular provision was enacted? Normal rule of interpretation is that, if the language is very clear then the provision is to be interpreted in its ordinary, popular and natural meaning. It is also well settled principle that, when the language of the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dment will take effect from 1st April, 2003 and will, accordingly, apply in relation to the asst. yr. 2003-04 and subsequent years." 11. It is abundantly clear from the explanation given in the CBDT circular that the basic intention to insert s. 50C is for the purpose of determining full value of sale consideration for the purpose of computation of capital gains under s. 48 of the Act. It is well-settled rule of interpretation that meaning ascribed by the authority (sic). The issuing of notification or circular is good guide of contemporaneous exposition of the position of the law and this rule is popularly known as 'contemporanea expositio'. This rule of interpretation has been given recognition by the Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (1981) 24 CTR (SC) 358 : (1981) 131 ITR 597 (SC). In our opinion, there should not be any cloud of doubt that s. 50C has application only to the extent of determining sale consideration for computation of capital gain under Chapter IV-E of the Act and it cannot be applied for determining the income under other heads. 12. We are therefore, of the opinion that, when admittedly in the present case the sale of the flats is tre....