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2016 (11) TMI 1119 - ITAT MUMBAI

2016 (11) TMI 1119 - ITAT MUMBAI - TMI - Applicability of section 50C - Held that:- We are of the considered view that the ld. CIT(A) has rightly come to the conclusion that section 50C of the Act states that value assessed by stamp duty Valuation Authority shall for the purpose of section 48 be deemed to be full value of consideration received or accruing as a result of such transfer. Thus by deeming provisions, sale consideration shall be deemed to be as value assessed by stamp duty valuation .....

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well as CIT(A) were correct in applying section 50C in the facts and circumstances of the present case - Nature of income - agricultural income - Held that:- CIT(A) while considering the said issue has granted sufficient time to the assessee to substantiate his arguments by supporting documentary evidence/proof but even inspite of availing opportunities the assessee could not furnish any vital evidences to establish the genuineness of the agricultural income. Therefore in absence of such evi .....

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ew that the findings recoded by the learned CIT (A) are judicious and are well reasoned. - I.T.A. No. 1272/Mum/2012 - Dated:- 21-9-2016 - SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSAIN, JM For The Appellant : None For The Respondent : Shri Mohammed Rizwan ORDER Per Sandeep Gosain, Judicial Member: The Present Appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)- 25, dated 27.12.2011 on the grounds of appeal mentioned herein below. 1. The learned Commiss .....

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nstead of prevailing in the market . 3. The learned Commissioner of Income Tax (Appeals) XXIV, Mumbai , has erred on facts and in law upholding the assessment order passed by the ld AO without giving reasons for his decision. 4. The learned Commissioner of Income Tax (Appeals) XXIV, Mumbai, has erred on facts and in law by upholding the assessment made by the ld AO where the AO has failed to determine the undisclosed income in accordance with the provisions section 50C of the Income Tax 1961. 5. .....

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ome without considering the judicially and not applying the natural justice. 7. The learned Commissioner of Income Tax (Appeals) XXIV, has erred on facts and in law by Penalty u/s271(1)(c) made b the ld AO as justifying in penalty on certain issue of the appellant. 8. The order of the ld Commissioner of Income Tax (Appeals) XXIV, Mumbai is bad in law. 9. The appellant craves leave to amend/alter any of the ground or grounds and / or add fresh ground or grounds as may be necessary at the time of .....

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ions on account of long term capital gain, on account of sale of gold and sales of shop. However the additions u/s 68 were also made. 3. Aggrieved by the order of the AO, assessee filed the appeal before CIT(A) and the CIT(A) after considering the case of the assessee dismissed the appeal of the assessee vide order dated 27-12-2011. 4. Aggrieved by the order of CIT(A), the assessee filed the present appeal before us on the grounds mentioned herein above. 5. At the very outset, it is noticed that .....

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e case ex-parte with the assistance of the ld. DR and the material on record. Ground No.1 to 4 5. Since all the grounds raised by the assessee are inter-connected and interrelated therefore we thought it fit to dispose off the same through the present common order. The afore mentioned grounds relates to the applicability of section 50C of the Act in the case of assessee. We have heard ld. DR and we have also perused the material placed on record as well as the orders passed by the revenue author .....

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cts stated in the assessment order, it immensely transpires that there is no force in the arguments of Ld. A.R. The Section sac of the Act states that value assessed by stamp duty Valuation Authority shall for the purpose of section 48 be deemed to be full value of consideration received or accruing as a result of such transfer. Thus by deeming provisions, sale consideration shall be deemed to be as value assessed by stamp duty valuation authority. The validity of this section was upheld by Hon& .....

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50C in Fiancé Act 2002, it was mentioned that the bill proposes to insert a new section 50C in the I.T. Act to make a special provision for determining full value of consideration in case of transfer of immovable property. Further .the heading of introduction of this clause in the Finance Bill 2002 was titled as "computation of capital gains in real estate transactions". Thus, the purpose' of section 50C was to cover all types of transactions pertaining to immovable propert .....

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#39;ble High Court of Madras further held in the same case that it is obvious from the reading of the provision of section 50C, rather it is not disputed that the same is inserted to prevent large scale under valuation of the real value of the in the sale deed so as to defraud revenue and the Govt. legitimately entitled tom by pumping in black money. The impugned provision has been incorporated to check such evasion of tax by under valuing the real properties. (180 Taxman 253 Mad). The Hon'b .....

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50C Section 50C is only a measure of tax and not the subject matter of tax. The valuation rule of the Stamp Act is for the purpose of computation' of income. It is only a standard' of measure for imposing tax. (Principle laid down in A. Sanyasi Rao 219 ITR 330 (SC) followed; (ii) Section 50C was introduced with a view to prevent evasion of tax and under- valuation of the transaction and must be read in that context. The classification made by section sac is in respect of an identifiable .....

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the cost of acquisition for purposes of section 48, section 50C modifies the term full value of the consideration received or accruing as a result of transfer of the capital asset . The two deeming fictions operate in different fields and there is no conflict between them. As section 50C was inserted to prevent assessee s indulging in under-valuation, there is no logic why it should not be applied to a depreciable building; (The full text of this judicial pronouncement is published in 54 DTR at .....

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stamp duty Valuation Authority shall for the purpose of section 48 be deemed to be full value of consideration received or accruing as a result of such transfer. Thus by deeming provisions, sale consideration shall be deemed to be as value assessed by stamp duty valuation authority. Ld. CIT(A) has also appreciated that the validity of this section 50C has already been upheld by Hon ble High Courts including that of Hon ble High Court of Madras and Hon ble High Court of Bombay. Ld. CIT(A) has dul .....

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has been upheld by Hon ble High Court and even Jurisdictional High Court of Bombay in the case of Bhatia Nagar Premises Cooperative Housing Society vs. UOI has upheld the applicability of Section 50C in case of a development agreement for the development and sale of land in the following words. (i) There is a distinction between the subject matter of a tax and the standard by which the amount of tax is measured. The subject matter of a tax is capital gains and the manner in which it should be c .....

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t of an identifiable group of assessee and is not arbitrary, unreasonable or discriminatory.(K.R. Palanisamy vs. UOI 306 ITR 61 (Mad) followed. 5.2 In addition the Hon ble Special Bench of Jurisdictional ITAT Mumbai, has also upheld the applicability of section 50C for depreciable assets/business assets, in the case of ITO vs. United Marine Academy the operative para of the judgement is reproduced below: There are two deeming fictions created in section 50 and section 50C for computing capital g .....

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he above cited judgments and therefore we are of the considered view that the AO as well as CIT(A) were correct in applying section 50C in the facts and circumstances of the present case. No new circumstance have been brought on record before us in order to controvert or rebut the findings recorded by learned CIT (A). Moreover, there are no reasons for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recoded by the learne .....

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ee was not in possession of any agricultural land. On being asked, the assessee submitted that the agricultural land was owned by his father who died in the year 2004 and the said land was inherited to him. He also submitted that agricultural income was regularly shown in earlier years which was accepted by the then A.O. in assessment u/ s 143(3) of the IT. Act 1961. However, he did not furnish any evidence as to holding of agricultural land etc. Accordingly the AO held that assessee had no genu .....

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ip of land i. e. to say Farm No. 8A and 7/12. 2. Income and expenditure account of agricultural produce. 3. Sale bills of agricultural produce, bills for seed, fertilizer, labour expenses etc. For this purpose he was given time of one month. However, neither the assessee nor the AR. could furnish such vital evidences to establish the genuineness of agricultural income. In absence of such evidences it cannot be said that impugned income was an agricultural income. On the contrary it immensely est .....

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f it is established that the same facts existed in. preceding year, it is amenable to take remedial action as per law to safeguard the interest of revenue. Accordingly this ground of appeal is rejected and action of AO is upheld (332 ITR 471 Delhi High Court). 8. After hearing ld. DR and perusal of the record we are of the considered view that although ld. CIT(A) while considering the said issue has granted sufficient time to the assessee to substantiate his arguments by supporting documentary e .....

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