TMI Blog2014 (9) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant : Shri P. N. Arora For the Respondent : Shri Saad Kidwai ORDER Per A. D. Jain,JM. 1. This is assessee's appeal against the order dated 09.10.2012 for the assessment year 2009-10 passed by learned CIT(A), Jammu. 2. The following effective grounds have been taken: i. The learned CIT(A) has grossly erred in law and facts of the case in confirming addition of ₹ 15,99,471/- on account of Dharmarth Receipts. ii. The learned CIT(A) has erred in law and on the facts of the case in confirming addition of ₹ 2,09,00,000/- by increasing the purchase cost of the assessee in respect of leasehold godown at Sector 26, Transport Nagar. 3. Apropos ground no. 1, the Assessing Officer made an addition of ₹ 15,99,471/- on account of Dharmarth Receipts collected along with freight receipt, not reflected by the assessee in its profit and loss account. 4. The Assessing Officer observed that the receipts were directly related to the business of the assessee company; that the receipts were received not by a trust created for the purposes of charity in nature, but by a company doing business and trading; and that no evidence had been fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR has placed strong reliance on the impugned order, contending that the objective of the assessee company is commercial and there was no reason to collect Dharmarth from its clients; and that the assessee has not been able to establish that the objective of the assessee company was to carry out charity. 9. It is not disputed that Dharmarth receipts are not taxable. This is as per the CBDT Circular (supra), as also the following decisions: i. CIT Vs. Bijli Cotton Mills (P) Ltd., (1979) 116 ITR 60 (SC) ii. CIT Vs. Gheru Lal Bal Chand, (1978) 111 ITR 134 (P H) iii. Addl. CIT Vs. Channoo Lal Damodar Dass, (1978) 113 ITR 759 (All.) iv. Addl. CIT Vs. Dalsukhrai Jaidayal, (1979) 117 ITR 466 (All.) v. Nathu Ram Shiv Narain Vs. CIT, (1982) 134 ITR 625 (P H) vi. CIT Vs. E.H. Kathawala Co., (1982) 135 ITR 384 (Bom.) vii. Chunnilal Onkarlal (HUF) Vs. CIT, (1982) 135 ITR 580 (MP) viii. CIT Vs. Ratilal Popatlal Shah, (1984) 43 CTR 4 (Bom.) 10. The only dispute before us is as to whether the receipts were, in fact, Dharmarth receipts. The assessee's stand in this regard is that it was collecting Dharmarth in GRs and gate passes, as part of charity; that this D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany, while holding that 'the appellant could not establish before me that the objectives of the company as per memorandum and articles of association was also to carry out charity.' 13. Therefore, finding merit in this grievance raised by the assessee, the same is hereby accepted. The impugned order in this regard is cancelled and the addition made is deleted. 14. The Assessing Officer made another addition of ₹ 2,09,00,000/-. The assessee had acquired, during the year, a shop-cumoffice No.25, measuring 777.77 sq. metres in Sector-26, Chandigarh. As per the registration deed dated 04.12.2008 with the Sub-Registrar, Chandigarh, the assessee company had shown payment of ₹ 18,00,000/- as the purchase price of the said property. The Estate Officer, Chandigarh, however, valued the property at circle rate, based on the prevailing market rates. The assessee paid stamp duty charges @ 3%, total amounting to ₹ 6,81,500/-. The minimum value of the property at the rate adopted by the Registering Authority came to ₹ 2,27,00,000/-. 15. The Assessing Officer observed that accepting the minimum fixed rate and depositing of fees on that rate means that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50C of the Act was required to be considered; that the seller and the buyer are two sides of the same coin and they have to be treated at par, otherwise, an anomalous result would ensue; and that as such, the circle rate ought to be applied in the case of the purchaser also and a deemed addition under Section 50C of the Act was warranted. 17. In this regard, the learned counsel for the assessee has contended that the assessee was a tenant in the demised premises since 1976 and the premises was being used by the assessee as a godown for doing business of transportation; that the rent for such property was paid by the assessee @ ₹ 3,000/- per month in 2002; that it was due to this encumbrance by the assessee over the demised property, that the seller/owner agreed to sell the same to the assessee for ₹ 18,00,000/- by a Memorandum of Understanding, dated 18.02.2002 (APB-35); that it was specifically mentioned therein that Where as the first party is lease holder of plot no. 25, sector 26 transport area Chandigarh [herein called property] and the second party is the tenant of the said property. 18. The learned counsel for the assessee has further contended that once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect 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. 21. A plain reading of Section 50C of the Act shows that the income under the head capital gains is applicable to the sale of immovable property, and not to purchase thereof. Therefore, the provisions of Section 50C(1) of the Act are not applicable to the case of a purchaser. It is well settled that the legislature chooses its words with utmost care. When the words of a particular provision are explicit, clear and unambiguous, there is no room for interpretation thereof and as such, the legislative intent qua such a provision is not required to be gone into, as has been wrongly done by the learned CIT(A) in the present case. The section talks of 'consideration received or accruing'. Period. 'Consideration paid' cannot be imported, when the legislature has itself not deemed it fit to incorporate anything to such effect in the section. 22. In view of the above discussion, this grievance of the assessee is also found to be justified and accepted as such. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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