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2018 (4) TMI 1517 - AT - Income TaxRevision u/s 263 - applicability of Section 50C of I.T.Act for computation of capital gains - Held that:- The assessee had agreed for transfer of property at ₹ 4 lakhs per acre at the time of reaching the understanding for development agreement and due to delay in pursuing the document for registration, there was a change of method in collection of stamp duty and accordingly collected excess stamp duty has no relevance since the assessee has not agitated this issue before any of the appellate authorities and the assessee has accepted the value of stamp duty adopted by the sub registrar office. No merit in the argument of the assessee and we hold that the Pr.CIT has rightly rejected the submission made by the assessee. As gone through the assessment order and observed that though the AO has examined the computation of short term capital gains, the AO has not examined the issue with regard to the stamp duty value assessed by the Sub Registrar Office and applicability of provisions of Section 50C of I.T.Act. In this case, the assessee has transferred the land for development and the registering authority has assessed the value of the land at ₹ 3,90,58,800/-. The assessee has not disputed the stamp duty value fixed by the Registering authorities. This issue was not examined by the AO and the assessment order is completely silent on this issue, hence we hold that there is no application of mind by the AO during the assessment proceedings. Therefore, the Ld.AR’s argument that the AO examined the issue with regard to the applicability of Section 50C of I.T.Act for computation of capital gains has no basis, accordingly the same is rejected. Though the assessee has transferred the undeveloped land and the developer has given physical possession of the developed plots as per the development agreement dated 28.06.2010, the fact remains that the assessee had retained 50% of the land and only 50% of the land was transferred to the developer, therefore, we are of the considered view that the capital gains has to be computed on 50% of the land transferred to the developer, but not on the entire developed land as contended by the CIT. However, the issue needs to be verified by properly examining the development agreement with regard to the transfer of land and retention of the land by the assessee and capital gains required to be taxed on that part of the land which was transferred to the developer. Therefore, prima facie, we hold that the Pr.CIT has rightly invoked the jurisdiction u/s 263 - We remit the matter back to the file of the AO with a direction to verify the development agreement and assess the capital gains on the land transferred to the developer, but not on the entire land. Accordingly appeal of the assessee is allowed partly.
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