TMI Blog2016 (3) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... office premises is justified. However, the objection raised by the AR against the valuation of the DVO is required to be considered, therefore, we feel necessary to allow further deduction @ 10%, in total 20% including Assessing Officer’s deduction from the fair market value estimated by the DVO. It is further noticed by the Bench that when book value as on 01/4/2006 has been taken for computing of the capital gain at ₹ 10,21,694/- whereas in assessment order it has been shown as on 31/3/2006 at ₹ 3,96,260/-, which is opening balance as on 01/4/2006. - Decided in favour of revenue - ITA No. 779/JP/2013 - - - Dated:- 29-1-2016 - SHRI T.R.MEENA, AM AND SHRI LALIET KUMAR, JM For The Revenue : Shri Kailash Mangal (Addl.CIT) For The Assessee : Shri P.C. Parwal (CA) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the revenue arising against the order dated 30/08/2013 passed by the ld CIT(A)-III, Jaipur for A.Y. 2007-08. The sole ground of the appeal is against deleting the addition of ₹ 39,38,796/- made by the Assessing Officer on account of capital gains. 2. The assessee is engaged in the business of trading of gem stones. He filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to him. The books of account of the firm as on 31/3/2005 were finalized wherein the immovable property assets were shown as under:- Office premises ₹ 22,70,430/- Agricultural land ₹ 7,98,994/- Land Building ₹ 3,96,260/- He further observed that in execution of the above deed of dissolution dated 31/3/2005 Shri Liyaqat Ali had taken over all the assets and liabilities, which had been duly shown in the balance sheet of his proprietory concern M/s S.L. Exports as on 31/3/2007. It is clear that the erstwhile partnership firm M/s S.L. Exports had dissolved w.e.f. 31/3/2005 vide dissolution deed executed on the same date and that dissolution deed was executed completely as such the immovable assets of the firm had been transferred from the firm to partner Shri Liyaqat Ali on 31/3/2005 and hence Shri Liyaqat Ali (assessee) was having all the rights and liabilities for these assets w.e.f. 31/3/2005. It is also clear from the balance sheet of the proprietory concern as on 31/3/2006. The ld Assessing Officer finally considered the definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the provisions of section 50C will be applicable in those cases also where the transactions are not registered and hence not assessed by stamp authority. As such the amendment brought out by the Finance Act 2009 in section 50C is clarificatory in nature. It is well settled legal position in view of Supreme Court and High Court decisions that the clarificatory amendments are retrospective in nature. 4. Since section 50C was inserted w.e.f. 1.4.2003, the word assessable is also deemed to have been inserted from its inception . In view of such legal position, the value 'assessable' by the Stamp Valuation authority i.e. DLC rates in present case, is taken to be the full value of consideration for the purposes of computing the capital gains arising from such transfer. 5. As regards the entries of transfer made in books of accounts on 1.4.2006 the submissions of Id. A/R do have force. Since the DLC as applicable on is not readiiy available, it is considered fair to make 10% deduction out of DLC rate as applicable on 31.3.2007 as proposed in the show cause notice dated 27.12.2011 so as to arrive at the FMV as on 01.04.2006. 6. The objection raised by Id. A/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Although assessing officer treated the same as the retrospective in operation, appellant submitted decision of Madras High Court and Ahmadabad tribunal in which it is clearly held that amendment to section 50C is prospective and not retrospective. Therefore there is no substance in assessing officer's argument that amendment to section 50C is retrospective. If the amendment is to be treated as prospective then in the case of unregistered property, assessable value cannot be taken as full value of consideration. Since the assessment year involved is 2007-08, the amendment to section 50C is not applicable. Properties are not registered and therefore assessable value by stamp duty authorities cannot be taken as full value of consideration. Accordingly capital gain worked out by the assessing officer cannot be sustained. The addition made by the AO is therefore deleted. 4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer and further argued that the ld Assessing Officer had applied fair market value on the basis of DLC as per Section 50C of the Act. In this case, it is undisputed fact that no registration has been m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DVO U/s 55A of the Act. However, property at office premises has been referred to the DVO, the Assessing Officer had given deduction on account of fair market value as on 01/4/2006 from the DVO s report as DVO had calculated the fair market value as on 31/3/2007. Therefore, the capital gain calculated by the Assessing Officer on their property i.e. office premises is justified. However, the objection raised by the AR against the valuation of the DVO is required to be considered, therefore, we feel necessary to allow further deduction @ 10%, in total 20% including Assessing Officer s deduction from the fair market value estimated by the DVO. It is further noticed by the Bench that when book value as on 01/4/2006 has been taken for computing of the capital gain at ₹ 10,21,694/- whereas in assessment order it has been shown as on 31/3/2006 at ₹ 3,96,260/-, which is opening balance as on 01/4/2006. The ld Assessing Officer is directed to verify the facts and make necessary change as per law. Accordingly, the revenue s appeal is allowed partly. 7. In the result, the revenue s appeal is allowed. Order pronounced in the open court on 29/01/2016. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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