TMI Blog2012 (9) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... mal documentation – As per AO property was actually transferred in the instant year – Held that:- As the fact that the property in question was agreed to be sold and conveyance done even prior to F.Y 2001-02 is not disputed even in the assessment order. AO is using is the final payment and documentation and on that basis, the application of Sec. 50C. It is clear from the fact that except for the last installment everything was completed prior to 2001-02. Therefore, Sec. 50C were neither there nor could have been applied. Appeal decides in favour of assessee. - I.T.A. NOS. 3841 & 3842/Mum/2009 - - - Dated:- 4-7-2012 - SHRI B. RAMAKOTAIAH SHRI VIVEK VARMA, JJ. Appellant by : Mr. Subhachan Ram (CIT DR) Respondent by : Mr. Vinod Kumar Bindal Mr. Gaurav Bansal. ORDER Per VIVEK VARMA, JM: The two appeals filed by the department arise from the orders of the CIT(A) XII, Mumbai, dated 30-03-3009. 2. As the grounds raised in both the appeals are identical, we are passing a common order for the sake of convenience. The department has taken the following grounds of appeal: 1) On the facts and in the circumstances of the case the Ld. CIT(A) erred in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is owner of the property and has full rights on title of property . The confirming parties are the tenants of the property and they have only tenancy rights and also they have no independent rights to enter into transaction for sale of the said property. 3) On the facts and circumstances, of the case the Ld. CIT(A) erred in deciding that the Section 50C can not be applied to the transaction with M/s Sumer Corporation as valuation has to be done by Stamp Duty Authority and not by A.O. himself. 3.1 The conclusion of the CIT(A) is riot factually correct, the amount of consideration was taken by A.O. as per the value narrated in ready reckoner. The ready reckoner is itself a document of stamp duty valuation prepared by Stamp Duty Officer. 4. The appellant prays that the order of CIT(A) on the above ground(s) be set aside and that of the Assessing Officer be restored. 3. The issues involved in the grounds taken by the department are, as to when exactly the property in question was actually transferred and whether the provisions of section 50C shall apply, once the value is adopted based on the stamp duty valuation. 4. The facts of the case are that the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terested parties approached the Stamp Authorities for the purpose of valuation during the relevant year. This observation of Assessing Officer is a surmise. Section 50C does not empower the Assessing Officer to adopt or alter any value except that what has been adopted by the Stamp Duty authorities. The statute does not allow the Assessing Officer to fix such value, if it has not been assessed or adopted by the Stamp authority and it does not suggest in any manner as to what should be the value for the purpose of what should the assessee have done in the given circumstances. The MOU dated 31/07/1998 had been considered by the Appropriate Authority u/Chapter XXC and the declared value was considered equivalent to the fair market value and no order for its compulsory acquisition was passed. The provisions of Section 50C is to ensure that revenue recovers proper capital gains tax where it suspects that the consideration shown is not the full consideration. It is not to victimize the seller or assessee who has returned the correct sale consideration. The Assessing Officer cannot ignore the provisions of Chapter XXC while applying Section 50C, as the said transfer value stands admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the capital gains shown by the appellant for the transfer of land to Sumer Corporation is held to be unjustified The enhancement of capital gains by Rs 226,46,41,736/- is deleted and the Assessing Officer is directed to adopt Rs. 56,78,52,782/- as the capital gain arising from the transfer of land to Sumer Corporation . 8. Against these factual and legal findings, the department is in appeal before the ITAT. 9. Before us, the DR vehemently argued the case of the department. On the other hand, the Authorised Representative strongly supported the order of the CIT(A). 10. We have heard the rival submissions and have perused the orders of the revenue authorities and material placed on record. From the facts emanating from the orders and the evidence, that the MOU with Sumer Corporation was signed on 31-07-1998, at the rate of Rs. 1,800 per sq. mt. and the assessee took non refundable consideration of Rs. 50 crores out of Rs. 58.25 crores and took the NOC from Appellate Authorities as required under the law as it then was, under Chapter XX-C of the I.T. Act and the possession of land was given. The controversy arose because of another MOU signed with Unique wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 1.36 crores as submitted by the assessee and held that provisions of section 50C shall apply and recomputed the LTCG on such basis at Rs. 9,52,67,250/- plus Rs. 13,00,024/- as LTCG for transfer of land to Mr. Nilesh Doshi. 16. The CIT(A), taking into consideration all the facts as submitted by the assessee and also the decision in CIT(A) in assessment year 2005-06, which actually pertained to the transaction in question, held, as under: 2.3 I have considered the submissions made for the appellant, the assessment order and the appellate order for the AY 2005-06. On examination of the facts as above, I am of the view that these grounds no. 1 to 3 are already covered in favour of the appellant by the appellate order dated 09/07/2008 of my predecessor passed in the case of the appellant for the A.Y. 2005-06 in appeal no. IT/259/O7-08. The then CIT(A) had elaborately discussed the issue regarding the transfer of the property made to M/s Unique estates in the appellate order for AY 2005-06. In the said order it was held that since the impugned property had already been conveyed to the buyer prior to Y 2001-02, the capital gains could not be taxed in Y 2005- 06. In the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not apply to the case of the assessee in the instant year as the capital gains arising thereof cannot be taxed in the instant year . 17. The department is in appeal before the ITAT against these findings of the CIT(A). 18. Taking into account the arguments of the DR and facts coming out of the orders of the revenue authorities, it is clear that the property had already conveyed to the buyer prior to 2001-02 and it was only the final part payment which was made during the year along with the formal documentation. The fact that the property in question was agreed to be sold and conveyance done even prior to financial year 2001-02 is not disputed even in the assessment order. The only skin of the nail, which the AO is using is the final payment and documentation and on that basis, the application of section 50. It is crystal clear from the fact that except for the last instalment everything was completed prior to 2001-02, in which case, the provisions of section 50C were neither there nor could have been applied. In these circumstances, we have to accept the findings of the CIT(A) who has based his order on the CIT(A) s order for assessment year 2005-06, where, the then CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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