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2013 (3) TMI 271 - HC - Income TaxProvision of Section 50C invoked - sale of the property has not been registered - AO computed the long term capital gains, adopting the guideline value as the sale consideration, instead of the consideration admitted by the assessee - whether the AO is entitled to take the value of the property assessable by the authority of the State Government for the purpose of payment of stamp duty in respect of said transfer or not? - Held that:- If the Board has issued a circular clarifying the applicability of Section 50C in pursuance of the amendment made by Amendment Act 2 of 2009 that the scope of the provisions does not include transaction which are not registered with stamp duty valuation authority and executed through agreement to sell or power of attorney is only prospective in nature and cannot be applied retrospectively, failure to understand as to how the Revenue can canvass the same issue in this case which in effect is against the circular issued by the Board. The Revenue is bound by the circular issued by the Board. See State of Tamil Nadu and another Vs. India Cements Ltd. and another reported in (2011 (4) TMI 1080 - SUPREME COURT OF INDIA) wherein held that the circulars issued by the Revenue are binding on the Department and therefore, they cannot repudiate that they are inconsistent with the statutory provisions. Thus the insertion of words "or assessable" by amending Section 50C with effect from 01.10.2009 is neither a clarification nor an explanation to the already existing provision and it is only an inclusion of new class of transactions namely the transfers of properties without or before registration. However after introduction of the words "or assessable" after the words "adopted or assessed", such transfers where the value assessable by the stamp valuation authority are also brought into the ambit of Section 50C. Thus such introduction of new set of class of transfer would certainly have the prospective application only. Hence the assessee's transfer admittedly made earlier to such amendment cannot be brought under Section 50C. Revenue is not entitled to canvass the correctness of the order passed by the Tribunal, more particularly in the light of the circular issued by the Board - substantial question of law answered against the Revenue.
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