TMI Blog2014 (9) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... tter remanded back – Decided in favour of Assessee. - Tax Case (Appeal) No. 28 of 2014 - - - Dated:- 12-8-2014 - R. Sudhakar And G. M. Akbar Ali,JJ. For the Appellant : Mr. Sriraman For the Respondent : Mr. T. Ravikumar Standing Counsel for Income Tax JUDGMENT (Judgment of the Court was delivered by G. M. Akbarali,J.) This Tax Case (Appeal) is filed at the instance of the assessee as against the order of the Income Tax Appellate Tribunal confirming the order of the Assessing Officer and the Commissioner of Income Tax (Appeals) that the evidentiary value of the registered document is more than that of unregistered document and the provisions of Section 50C of the Income Tax Act shall be applicable. 2. The brief facts are as follows: On 27.10.2001, the assessee entered into two sale agreements with one Smt.G.Rajamani and Shri.V.R.Govindasamy to sell the property for a total consideration of ₹ 1,70,41,261/- divided as ₹ 85,41,261/- for the sale to V. R. Govindasamy and ₹ 85,00,000/- for the sale to Smt. G. Rajamani. The total land measuring 9,420 sq.ft. together with building thereon at Arumbakkam, Chennai was given as collateral securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the loan applied was 750 lakhs. This forced me to enter into a distress sale of the said property on 27.10.11 (i.e., in the financial year 2001-02 relevant to the assessment year 2002-03) with Mr.V.R.Govindasamy and his wife Mrs.G.Rajamani for a total sale consideration of ₹ 1,70,41,261/- (Rs.85,41,261/- and ₹ 85,00,000/- respectively). Clause No.2 of the said sale agreements clearly states that the property is given collateral security for the loans raised form SIPCOT and hence, the original title deeds are deposited with SIPCOT and the sale deeds shall be executed soon after the release of the original title deeds. Clause No.7 of the said sale agreements says that the possesion of the property is handed over to the purchasers on thedate of the sale agreements. The registration of sale deeds was delayed upto 2006 and finally registered on 17.05.06 by receiving the balance sale consideration since the title deeds were procured only in 2006 from Catholic Syrian Bank. 4. After examination of the details filed by the assessee and the facts and circumstances of the case, the Assessing Officer rejected the explanation given by the assessee for the following re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed the addition of ₹ 1,57,22,427/- made by the Assessing Officer. As against which,the assessee went on further appeal before the Income Tax Appellate Tribunal. The Tribunal considered Section 50C of the Income Tax Act, which was introduced in the year 2003 and found that the assessee was not able to show that the transaction was completed before coming into force of Section 50C of the Income Tax Act, nor the assessee was placed on record any reliable evidence to prove that the possession of the property in question had been handed over to the vendees at the time of execution of the sale agreements. Accordingly, the Tribunal, while dismissing the appeal filed by the assessee confirming the order of the Commissioner of Income Tax (Appeals), held as follows: Evidentiary value of registered document is more than that of unregistered document, therefore, higher degree of reliance has to be placed on the contents of registered sale deed over sale agreement which is unregistered. In view of the facts and circumstances of the case, we are of the view that the provisions of section 50C shall be applicable on the transactions with respect of sale of land and building. The orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where (a) the assessee claims before any Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer ; (b) the value so adopted or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50C of the Income Tax Act. 13. In this regard, reliance has been placed on the decision of this Court in the case of S.Muthuraja V. CIT reported in 2013 (8) TMI 40, wherein this Court had an occasion to consider a case of distress sale and held that when an objection is made by the assessee to the Assessing Officer with regard to the adoption of market value under Section 50C(1) of the Income Tax Act, the Assessing Officer ought to have referred the valuation of the capital asset to the Valuation Officer and remitted the matter back to the Assessing Officer to work out the capital gains by invoking the provisions of Section 50C(2) of the Act. While remanding the matter to the Assessing Officer, this Court further held as follows: 2. It is seen from the records filed before this Court that the assessee objected to the Assessing Officer adopting the guide-line value relating to the property sold for the sale consideration of ₹ 25,60,000/= as against the guide-line value adopted by the Assessing Officer at ₹ 39,63,900/-. In the objection letter filed by the assessee on 15.12.2011, the assessee specifically pointed out that the sale was more in the nature of distress ..... X X X X Extracts X X X X X X X X Extracts X X X X
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