TMI Blog2016 (1) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... quence when Section 50C of the Act is not applicable in the case of the assessee. In this view of the matter, it is clear that provisions of Section 50C of the Act would not apply in the case of the assessee, therefore, no long term capital gain could be computed as is done by the authorities below in the case of the assessee. The authorities below have failed to take note of the fact that the plaintiffs Vinay Verma etc. have mentioned in the plaint that the family settlement take place between the parties i.e. the nephews of the assessee and the assessee in the month of January,2008 and since then, the plaintiffs are in ownership and in possession of the property. The claim of the plaintiffs have been admitted by the assessee as defendant in that suit by admitting the claim of the plaintiffs and prayed that decree may be passed accordingly. The Civil Court, on the basis of these facts, admitted the claims of the plaintiffs and decreed the suit for declaration vide judgement dated 07.03.2009 therefore, it is clear that the property was transferred in the month of January,2008 through oral family settlement, therefore, assessee rightly contended that no long term capital gain ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mutual family settlement. The Assessing Officer referred to provisions of Section 50C of the Income Tax Act for the purpose of determining the long term capital gain. The Assessing Officer, in order to arrive at the sale price of the property sold, requested the Tehsildar/Registrar, Yamuna Nagar under section 133(6) to furnish copy of any sale deed and also the circle rate of the property got registered in the month of February,2009 around B-9/1, Industrial Area, Yamuna Nagar i.e. the same area in which the property of the assessee was situated. The Sub Registrar, Jagadhri vide his letter dated 31.12.2013 furnished a copy of the Sale Deed got registered on 30.03.2009 in Industrial Area, Yamuna Nagar in which it was clearly mentioned that collector rate of the property in Industrial Area, Yamuna Nagar in which the property of the assessee was situated during March,2009 was at ₹ 8,000/- per sq.yd. The Assessing Officer, therefore, was of the view that assessee has not reported long term capital gain amounting to ₹ 55,03,319/-. The explanation of the assessee was called for on these facts. 3. The Assessing Officer after considering explanation of the assessee rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lal (HUF) 177 I TR 198 in which it was held that a relinquishment takes place when the owner withdraws himself from the property and abundance his rights thereto. The ld. CIT(Appeals) also noted that transfer of ownership was decided by the Court decree dated 07.03.2009 and suite was instituted in July,2008 and long term capital gain have been declared in assessment year 2009-10 under appeal, therefore, capital gain arises in assessment year under appeal. The ld. CIT(Appeals) held that conditions of Section 50C of the Act are applicable in this case and accordingly, dismissed the appeal of the assessee. 6. We have heard ld. Representatives of both the parties and perused the findings of authorities below. The ld. counsel for the assessee reiterated the submissions made before authorities below and referred to Board's circular and certain decisions in support of his contention that Section 50C of the Act would not apply in the case of the assessee because no Sale Deed is registered and that Section 50C of the Act was amended w.e.f. 01.10.2009 adding the word 'assessable' therefore, the existing provisions under section 50C of the Act would not apply in the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation --For the purposes of this section, Valuation Officer shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.] 8. The above provisions under section 50C of the Act were later on amended by inserting the word 'assessable' after the word assessed w.e.f. 01.10.2009. The Board's circular dated 01.10.2009 explaining the reasons for inserting the word 'assessable' have been explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred the matter to Stamp Valuation Authority in order to find out value of the property for payment of stamp duty. The Assessing Officer, by invoking provisions of Section 50C of the Act computed the long term capital gain adopting the guideline value as the sale consideration instead of consideration admitted by the assessee. The ld. CIT(Appeals) allowed the appeal of the assessee holding that Section 50C of the Act can be invoked only when property was transferred by way of registered Sale Deed and assessed for stamp valuation purposes. The Tribunal also dismissed the appeal of the department on the same reasoning. Hon'ble High Court held as under : 5. Heard the learned counsel on either side. 6. The issue involved in this case is as to whether the assessing officer is entitled to take the value of the property assessable by the authority of the State Government for the purpose of payment of stamp duty in respect of said transfer or not. Admittedly, in this case, no registration of sale deed had taken place. lt is the case of the Revenue that only in pursuance of the agreement of sale, the assessee had transferred the property and received the sale consideration. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax deferral scheme would be available to a dealer from the date of reaching of BPV or BSV, whichever is earlier, as is pleaded on behalf of the first respondent. It is trite law that circulars issued by the Revenue are binding on the departmental authorities and they cannot be permitted to repudiate the same on the plea that it is inconsistent with the statutory provisions or it mitigates the rigour of the law. 22. In Paper Products Ltd. Vs. Commissioner of Central Excise ((2001) 247 ITR 128 SC: (1999) 7 SCC 84), while interpreting Section 37B of the Central Excise Act, 1944, which is in pari materia with Section 28A of the TNGST Act, this Court had held that the circulars issued by the Central Board of Excise and Customs are binding on the Department and the Department is precluded from challenging the correctness of the said circulars, even on the ground of the same being inconsistent with the statutory provision. It was further held that the Department is precluded from the right to file an appeal against the correctness of the binding nature of the circulars and the Department's action has to be consistent with the circular which is in force at the relevant point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onth of January,2008 which was confirmed by the judgement of the Civil Court dated 07.03.2009. Therefore, in the case of the assessee, no consideration has been assessed by the Stamp Valuation Authority. Since no sale deed or agreement have been registered in the case of the assessee, therefore, provisions of Section 50C of the Act would not apply in the case of the assessee. The word 'assessable' has been inserted in Section 50C of the Income Tax Act w.e.f. 01.10.2009 therefore, the amended provisions would not apply to assessment year under appeal i.e. 2009-10. The authorities below have rejected the explanation of the assessee, because assessee has shown long term capital loss in the return of income in assessment year under appeal. Hon'ble Supreme Court in the case of CIT Vs Mahalakshmi Mills 160 ITR 920 held that, Duty cast on Assessing Officer to apply relevant provisions of law f or the purpose of deter mining the true figure of assessee's taxable income . Therefore, merely the assessee has shown capital loss in the return of income would be of no consequence when Section 50C of the Act is not applicable in the case of the assessee. In this view of the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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