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2022 (1) TMI 1205 - ITAT MUMBAIReopening of assessment u/s 147 - taxability of transfer of immovable property - HELD THAT:- The provisions of Section 50 C of the income tax act clearly provides that fair market value of the property is required to be substituted as consideration received or accruing as a result of the transfer of a capital asset by the assessee where the actual sale consideration received or accruing is less than the value adopted or assessed by an authority of state government for the purpose of payment of stamp duty in respect of such transfer. The value so adopted or assessed shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for the purposes of computation of capital gain u/s 48. Accordingly for computation of capital gain according to the provisions of Section 48 of the income tax act which is chargeable according to the provisions of Section 45 of the act, the difference between the actual sale consideration and fair market value of the property as described u/s 50C of the income tax act is required to be used. In the present case for assessment year 2005 - 06 there is no transfer of asset, and therefore, there is no chargeability of capital gain u/s 45 of the act. Thus the provisions of Section 48 are also not triggered for this year. Therefore for assessment year 2005 – 06 there is no implication of provisions of Section 50C. The learned dispute resolution panel in paragraph number 2.5 has noted that assessee has failed to provide evidence to substantiate its claim of transfer of possession and final receipt of money in assessment year 2004 – 05 and as the property was registered on 23/4/2000 for i.e. during assessment year 2005 – 06, therefore, it confirmed the action of the learned assessing officer to tax capital gain in the assessment year 2005 – 06. DRP ignored the agreement to sell entered into by the assessee. Further if the learned DRP was of the view that capital gain is chargeable to tax in assessment year 2005 – 06, they should have directed the learned assessing officer to make the total addition of the capital gain in assessment year 2005 – 06. Even for ld AO and ld DRP it cannot act as deterring fact that capital gain is offered by assessee in AY 2004-05, those authorities are required to tax correct income in right hands for right assessment year. Therefore, there is a contradiction in the direction of the learned dispute resolution panel. No reason to uphold the reopening of the assessment as well as addition on merits for the reason that:- i. there was no transfer of any capital asset during assessment year 2005 – 06 but in assessment year 2004 – 05. j. The capital gain has already been charged to tax by the learned assessing officer by passing an order u/s 143 (3) of the act for assessment year 2004 – 05. k. The provisions of Section 50 C can be applied in the year in which provisions of Section 45, 48 read with Section 2 (47) of the act are triggered. In this case the provisions of Section 45, 48 and 2 (47) of the act are triggered in assessment year 2004 – 05 whereas the learned assessing officer has invoked the provisions of Section 50 C of the act for assessment year 2005 – 06. l. There was no failure on part of the assessee at least for AY 2005-06, in disclosing fully and truly all material facts, as there was no Transfer u/s 2 (47), nothing was chargeable u/s 45 and therefore no computation was to be made u/s 48 and therefore there is no applicability of section 50C in the year which is reopened by AO.
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