TMI Blog2013 (8) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by the A.O. that valuation u/s 50-C of the Income Tax Act, 1961 (the Act) is to be considered while computing gain from sale of properties without considering the fact that consideration for the sale of property was fixed prior to the date on which section 50-C of the Act came into force. 2. The assessee in the present case is an administrator to the Estate of Late Mr. E.F. Dinshaw holding landed properties and other tenanted properties with EF Dinshaw Trust EF Dinshaw Charities jointly. During the year under consideration, two properties of the said estate were sold at a consideration of Rs. 42,55,045/- and profit arising from the sale was declared by the assessee under the head "long term capital gain" in the return of income filed for the year under consideration. Consistent with the stand taken in the earlier year, the A.O. held that the profit arising from the sale of property was chargeable to tax under the head profits and gains from business or profession. He also found that the market value of the property sold by the assessee as per stamp duty authority was Rs. 5,95,78,500/-. When the assessee was asked by the A.O. to explain the vast difference between suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of computing capital gain arising from the sale of property. 4. The ld. counsel for the assessee, at the outset, invited our attention to the statements furnished by the assessee giving the sequence of events involved in the two transactions of sale of properties by the assessee to point out that although the relevant agreement to sale of the impugned property had been entered into much earlier, there was a delay in executing and registering the conveyance deed due to various reasons beyond the control of the assessee. He submitted that although the property of the assessee agreed to be sold to Avadh Narayan Sing Others on 12-3-1999 by accepting their offer in response to the tenders invited by the assessee on 12-3-1999 and the total consideration of Rs. 25 lacs was also received upto 3-5-1999, the conveyance deed could be executed only on 3-8-2004 for want of the approval from Charity Commissioner and clearance from ULC authority which took a lot of time. He submitted that similarly the another property of the assessee was agreed to be sold to Tarashankar B. Choubey on 6-10-1982 and even though the agreement was also executed on 7-2-1997 accepting part consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f consideration for the transfer of assets other than capital assets in certain cases and pointed out that sub-section (3) thereof specifically provides that where the date of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to sub-section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement. He contended that similarly as per the first proviso to section 56- (2)(vii), where the date of agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of agreement is to be taken for the purposes of clause (vii) of sub-section 2 of section 56. He contended that these provisions specifically made in the statute clearly shows the legislative intention that where the date of agreement fixing the amount of consideration for a transfer of capital asset and the date of registration are not the same, the stamp duty value on the date of agreement should be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was agreed to be sold to Avadh Narayan Singh Ors on 12- 3-1999 for Rs. 25 lacs and even this entire consideration was received by the assessee upto 3-5-1999. Meanwhile on 5-4-1999, the assessee moved the Charity Commissioner u/s 36(1) of the BPT Act for the required approval which the assessee received only on 4-10-2001. Then, the purchasers also applied for the NOC/Clearance required from the ULC authority on 2-8-2002 which was finally received in the required form only on 11-12-2003. Meanwhile the approval granted by the Charity Commissioner for a specific period was required to be extended and such extension was ultimately granted by Charity Commissioner only on 20-4-2004. Accordingly the final conveyance was executed on 3-8-2004. The delay in executing the final conveyance of the property thus was because of the delay in getting the required clearances from the concerned authorities, which was beyond the control of the assessee. Similarly, there was a delay in executing the conveyance of the other property agreed to be sold by the assessee to Tarashankar B. Choubey for which the agreement was executed on 7-2-1997 itself and even the consideration of Rs. 10 lacs was partly rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Siva Parvathi Ors. (supra), and the ratio of the decision rendered by the Tribunal in the said case is squarely applicable in the present case. We therefore, respectfully follow the said decision of the co-ordinate Bench of this Tribunal and hold that section 50-C of the Act cannot be applied to the sale agreements entered into before the introduction of the said provisions i.e before 1-4-2003 especially when delay in execution and registration of conveyance is sufficiently explained and there is no allegation of suppression of actual consideration. Accordingly, we delete the addition made by the A.O. and confirmed by the ld. CIT(A) on account of capital gain arising from transfer of properties of the assessee by applying the provisions of section 50-C of the Act and allow ground No. 1 of assessee's appeal. 11. As regards the issue raised in ground No. 2 relating to levy of interest u/s 234B and 234D, the ld. counsel for the assessee has sought only consequential relief. The A.O. is accordingly directed to allow consequential relief to the assessee on this issue. 12. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 14-08-2013. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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