TMI Blog2012 (1) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gain of ₹ 15,75,112/- and claimed the same as exempt u/s 54EC of I. T. Act, 61. The said return was processed u/s 143(1) and intimation u/s 143(1) dated 29-12-2003 was received by assessee. The assessee vide agreement dated 06-09-02 sold her plot bearing No. A-7 situated in Scheme No. S-12 of The Krishna Co-operative Housing Society for ₹ 18,00,000/- (The plot of land was in village Hirapura, Ajmer Road, Jaipur which is not a regularized colony of JDA) through agreement to sale under which assessee received full sale consideration and gave physical possession of plot of land to purchaser. Thus in terms of section 2(47) (v) of I. T. Act, 61 it was a transfer of capital asset which was liable for capital gain u/s 45 in F.Y. 2002-03 (A.Y. 2003-04) and assessee accordingly declared it in return. The sale consideration received by assessee was more than prevailing DLC rate as is evident from DLC rate list and also comparable from the sale instance of nearby plot No. A-38 sold in December, 2006 through registered sale deed @ ₹ 571/- per Sq. yd. by some other person. The purchaser later on 16-05-07 got sale deed registered in his favour from assessee in pursuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment. The ground in respect of applicability of section 50C was also confirmed by placing reliance on the decision in case of ITO vs. United Marine Academy, 138 TTJ 129 and in case of Ravi Kant vs. ITO, 110 TTJ 297. The contention of the assessee that sale was made through agreement and not through registered sale deed and, therefore, provisions of section 50C are not applicable was also rejected by ld. CIT (A) by passing a detailed order. Other various contentions raised before him were also taken into consideration by ld. CIT (A) and found that explanation of the assessee is not satisfactory. The decision relied upon by assessee in case of Mooli Rami Reddy, 2011 TIOL 135 was not found applicable on the facts of the present case. Accordingly, he confirmed the action of the AO and rejected the appeal of the assessee. 6. Now the assessee is in appeal here before the Tribunal and various grounds mentioned have been raised before the Tribunal. 7. The ld. Counsel of the assessee reiterated the contentions raised before ld. CIT (A). Copy of written submissions was also filed which is placed on record. The written submissions were explained in brief by ld. A/R. Reliance was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al proposition the assessee relied on judgment referred above. The information received by Ld. A.O. was not relevant having no nexus for A.Y. 2003-04 and, therefore notice issued by Ld. A.O. was wrong and bad in law. The Ld. CIT (A) has not touched this issue at all while dismissing the ground which is not in accordance with law. 10. Regarding confirming the action of the AO for invoking provisions of section 50C, the following submissions have been made by ld. A/R. It is submitted that Ld. A.O. is wrong and has erred in law in invoking provisions of section 50C of I. T. Act, 1961 in respect to transfer of a plot of land No. A-7 Scheme No. 12, Ajmer Road, Jaipur transferred by appellant in the year under assessment although the provisions of section 50C are inapplicable in the case in much as the subject property was transferred on 06-09-02 under an unregistered agreement to sale with handing over physical possession of property to purchaser on receiving full sale consideration from her. Thus transfer was completed on 06-09-02 while section 50C came into force w.e.f. 01-04-03 i.e. transaction of transfer completed on or after 01-04-03; The above legal position has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imagination, the legal fiction confined to restricted operation can be widened to include within its sweep all the cases where such property has not been valued by the State authorities for stamp duty purposes. The property in respect of which valuation is made for purposes of stamp duty must be the very same property which is the subject matter of transfer for calculating capital gain by invoking the provisions of this section. Unless the property transferred has been registered by sale deed and for that purpose the value has been assessed and stamp duty has been paid by the parties, section 50C cannot come into operation. In such a situation, the position existing prior to section 50C, would apply and the onus would be upon the Revenue to establish that sale consideration declared by the assessee was understated with some clinching evidence. Thus where the assessee transferred the property in question by executing an agreement which was not registered with the registering authority section 50C had no application to such a case. It is further submitted that the Finance (No.2) Act, 2009 has amended Sec. 50C by which the word assessable has been inserted in it w.e.f. 1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised certain points which are wrong. The assessee received last payment by 23-01-03 i.e. in F.Y. 2002- 03 (A.Y. 2003-04) and if agreement stipulated six months time but payments made earlier to than is not a relevant factor. The circumstances why registration could not be done for over three and half year was also explained i.e. the plot was in Prithvi Raj Nagar a disputed colony for which cases were pending in Rajasthan High Court and the High Court held that land under the colony is Govt. acquired land. However as Rajasthan Govt. time to time assuring for its regularization and so plots are purchased and mostly sold on agreements to sale with possession. However the findings of Ld. CIT (A) is not relevant as if these are taken as correct no capital gain can be assessed in A.Y. 2003-04 while the Ld. A.O. assessed the same in A.Y. 2003-04 and Ld. CIT (A) also upheld the same. In view of this the Ld. CIT (A) is wrong in ignoring the above legal contention which is very well supported and accepted in large number of judicial decisions. 11. Regarding calculating capital gain of ₹ 2,40,39,372/- on transfer of said plot of land without considering the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. in course of assessment proceedings which was ignored by Ld. A.O. The Ld. A.O. is thus wrong and has erred in law in brushing aside valuation report made by Valuation Officer (I.T. Dept.) of the said same property in case of purchaser even though it have the same effect as that having been prepared u/s 50C(2) and so the said report was binding on A.O. The D.V.O. valued the property at 32,01,100/- and in appeal the Ld. CIT (A) accepted the declared value of ₹ 18,00,000/- (P.B. Page 30 36) The Ld. CIT (A) held that assessee did not raised objection before Ld. A.O. so as to invoke section 50C(2) by him and refer the case to valuation officer for valuation of property. It is submitted that assessee raised objection as is evident from assessment order but as there was already a valuation report of Valuation Officer (IT Dept.) of the said property it referred to the same as well as filed copy of appeal order of CIT (A) in case of purchaser. The Ld. A.O. should have considered the same as he is not expected to take advantage of technical mistake of an ignorant lady assessee moreso when relevant material is made available to him. The Ld. CIT (A) also held that A.O. is not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntered into by assessee and purchaser is back dated. However, no material has been brought on record that on which basis the ld. CIT (A) is saying that this agreement is back dated. If the agreement is back dated, then no addition can be made in the year under consideration as any addition can be made in the year when the sale deed is registered in the Office of Sub Registrar. Therefore, this contention of ld. CIT (A) is not tenable. Accordingly, the same is rejected. The ld. CIT (A) has also mentioned in his order that the payment has been made by assessee by giving post dated cheque. It is seen that all the cheques given by the assessee were cleared in the month of January, 2003 itself. Details of cheques are as under :- Cheque for ₹ 1,00,000/- dated 4.9.2002 was given at the time Of execution of agreement on 6.9.2002. Cheque for ₹ 2,50,000/- dated 10.9.2002 Cheque for ₹ 5,50,000/- dated 02.10.2002. Cheque for ₹ 3,00,000/- dated 11.11.2002 Cheque for ₹ 3,00,000/- dated 11.12.2002 Cheque for ₹ 3,00,000/- dated 23.01.2003 All these cheques have already been cleared and the amount so received by the assessee was credited in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material worth the minimum to show that the sale consideration declared by assessee was under stated, the addition was wrongly made and sustained. Therefore, the addition was deleted. While holding so, the Jodhpur Bench has taken into consideration the decision of Hon ble Apex Court in case of K.P. Varghese, 131 ITR 597 (SC), 159 ITR 79 (SC) and 48 ITR 59 (SC). 13.1. In another decision, the Vishakhapatnam Bench of the Tribunal in case of Moole Rami Reddy, 2011 TIOL 135 ITAT has given similar finding. Copy of this order is also placed on record and we have gone through this order and found that they have held that provisions of section 50C are not applicable where the property was transferred through sale agreement. They have also taken into consideration that value in the sale agreement was higher than value shown in the certificate of Government authorities. In this case also the decision of Hon ble Supreme Court in case of K.P. Varghese (supra) was considered and accordingly the issue was decided in favour of the assessee. Therefore, we hold that ld. CIT (A) was not justified in not taking into consideration the various decisions of the Tribunal which were binding in nature f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was sold by the husband of the assessee was adjacent to the plot of the assessee bearing no. A-6 and plot sold by assessee was bearing no. A-7 in the same area. For this reason also, no addition should have been made in the hands of the assessee. 14. We have also taken into consideration the case relied upon by ld. CIT (A) i.e. in case of United Marine Academy, 138 TTJ 129 (Special Bench). In this case the issue was not in respect to that in case of sale of land through unregistered agreement provisions of section 50C are applicable or not as in this case the issue was whether section 50C are applicable in case of depreciable assets or not. Therefore, we are of the view that reliance placed by ld. CIT (A) in this case was not correct. 14.1. Similarly, in case of Ravi Kant, 110 TTJ 297, we find that the facts are totally different and this has already been considered by Jaipur Bench of the Tribunal in case of Ashutosh Bhargava, XLIV Tax World 173. Therefore, this case is also not applicable on the facts of the present case. We have also seen other cases on which reliance has been placed by ld. CIT (A) and find that they are also not applicable on the facts of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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