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2017 (9) TMI 1161 - HC - Income TaxDetermination of agricultural land - capital asset u/s. 2(14) (iii)(b) - transfer of land - whether municipal limits existing on the date of issue of Notification No.9447 dated 06.01.1994 u/s 2(14)(iii)(b) should be considered for the purpose of determination of agricultural land instead of the municipal limits existing on the date of sale/transfer? - Held that:- As decided in Commissioner of Income Tax vs. Shri Sher Singh Sunda [2017 (9) TMI 1045 - RAJASTHAN HIGH COURT]Section 50C is a deeming provision which incorporates a legal fiction to adopt the stamp duty value as full consideration for transfer of capital asset being and building. The legal fiction cannot extend beyond the purpose for which it is enacted. Hence the legal fiction created in Section 50C cannot be applied in respect of transfer of capital asset other than land or building including the rights in land and building just like tenancy right. In the instant case, the assessee has not received consideration on account of transfer of land and building but has received consideration in respect of transfer of purchase agreements. The Jaipur Bench in the case of Vijay Luxmi Dhadia, [2008 (9) TMI 944 - ITAT JAIPUR] held that Section 50C will not apply if the transfer document is not stamped. The plots are still to be registered with Stamp Valuation authorities. The Ld. CIT(A) has clearly observed that the word ‘assessable’ has been inserted in Section 50C of the Income Tax Act by the Finance (No.2) Act, 2009 w.e.f. 01.10.2009. The consideration as adopted by the stamp valuation authority can be taken as full consideration if the value adopted by the stamp valuation authority is assessable w.e.f. 1.10.2009. The assessment year under reference is 2006-07 and therefore, the amended provisions of Section 50C is not applicable. AO was not justified in applying the provisions of Section 50C of the I.T. Act for increasing the short terms capital gain. The Ld. CIT(A) was justified in deleting the increase in the value of short term capital gain. It is not the case of the Revenue that the assessee has received more consideration as shown in the agreement. In case there was any evidence to show that the consideration received by the assessee was more than the consideration mentioned in the agreement then the Revenue could have increased the short term capital gain. On the basis of Section 50C of the Act, the AO was not justified in enhancing the short term capital gain. - Decided in favour of the assessee
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