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2017 (2) TMI 588 - ITAT JAIPUR

2017 (2) TMI 588 - ITAT JAIPUR - TMI - Addition on account of Short term capital gain u/s 50C - sale of Reservation Letter (Arakshan Patra) - considering the value adopted by Sub-Registrar - whether the value adopted by the registration authorities is in excess to fair market value of the property? - Held that:- The plain reading of Section 50C shows that this provision is applicable only for the capital assets being land or building or both. Taking into consideration all the facts and circumsta .....

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sessee has filed an appeal against the order of the ld. CIT(A) dated 16-06-2016 for the assessment year 2011-12 raising therein following ground of appeal. Under the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in confirming the addition of ₹ 6,05,980/- made on account of Short term capital gain u/s 50C of I.T. Act, 1961 by considering the value adopted by Sub-Registrar at ₹ 15,85,980/- more so when during the assessment proceedings the assessee obje .....

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on 50C of I.T. Act,1961 on the sale of Reservation Letter (Arakshan Patra) which is neither land nor building but it is a right to receive the allotment of land. (i) NTPC Ltd. vs. CIT (1998) 229 ITR 383 (SC) (ii) Zakir Hussain vs. CIT & Anr (2006) 202 CTR 40 Raj. (iii) Siksha vs. CIT (2011) 336 ITR 112 (Orissa) (iv) West Bengal Electricity Board vs. DCIT (2005) 278 ITR 218 (Cal.) (v) Orissa Cement Ltd. vs. CIT (2001) 250 ITR 856 (Del.) (vi) Ahmedabad Electricity Co. Ltd. vs. CIT (1993) 199 I .....

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the decision of the Hon'ble Apex Court in the case of NTPC Ltd. vs. CIT and other case laws (supra) relied on by the assessee is admitted. 3.1 Apropos solitary ground of the assessee as well as the additional ground raised by the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- 3.2 I have duly considered assessee's submission and carefully gone through assessment order. I have also taken a note of factual matrix of the case as well as applicable case laws re .....

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r:- Special provision for full value of consideration in certain cases. 50C. (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purpo .....

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the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for computing capital gain. In view of facts and circumstances of the case, I do not find any reason to intervene accordingly assessee's appeal is hereby dismissed. 3.2 During the course of hearing the ld. AR of the assessee filed the following written submission praying therein to delete the addition of ₹ 6,05,980/-confirmed by the .....

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sessee was required to adopted such DLC value of ₹ 15,85,980/- for the purpose of calculating the capital gain. Thus the ld. AO by rejecting the submission of the assessee applied the provisions of 50C of Income Tax Act, 1961 computed the capital gain by taking the full value of consideration ₹ 15,85,980/- as against ₹ 9,80,000/- taken by the assessee resulted addition of ₹ 6,05,980/- in total income of the assessee. Findings of ld CIT(A) The findings of ld CIT(A) are at .....

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garwal 09.07.2010 91 1,60,000 2,96,940 Chetanaya PrakashGoyal 09.07.2010 68 1,60,000 2,60,260 Bhawana Agarwal 09.07.2010 118 2,50,000 3,84,260 Suman Agarwal 09.07.2010 118 2,50,000 3,84,260 Total 463 9,80,000 15,85,980 At the outset we submit that the provisions of section 50C are not applicable in the case of the assessee. The assessee has sold Reservation Letter (Arakshan Patra). The Arakshan Patra is a right to receive 20% residential land and 5% commercial land in lieu of the land acquired b .....

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m the reading of Section 50C, it is evident that Section 50C is a deeming provision and it extends only to land or building or both. Section 50C can come into play only in a situation where the consideration received or accruing as a result of the transfer by an appellant of a capital asset, being land or building or both is less than the value adopted or assessed or assessable for the purpose of payment of stamp duty in respect of such transfer. It is settled legal proposition that deeming prov .....

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esidential land and 5% commercial land. These Arakashan Patra cannot be terms as land or building therefore the provisions of section 50C cannot be applied. Reliance is placed on the following decision:- (i) ITAT Ahmedabad Bench:- Smt. Devindraben I. Barot Versus Income Tax Officer, Ward 9(2) , Ahmedabad 2016 (7) TMI 275 ITAT AHMEDABAD ITA. No: 2220/AHD/2012 Dated: 06 May 2016 (Copy of decision is enclosed) (ii) ITAT Ahmedabad Bench:- ITO Vs Shri Yasin Moosa Godil ITA No 2519/Ahd/2009 order date .....

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12 2. Ground No 1 of Form No 36 We submit that during the course of assessment proceedings the assessee objected that the value adopted by the registrar authorities is in excess to fair market value of the property. However the lower authorities have not considered the submission of the assessee and the value adopted by the registrar authorities was taken as full value of consideration for computing the capital gain. The ld. AO did not complied the provisions of section (2) of section 50C, which .....

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provisions of this section. In view of above your honor is requested kindly to delete the addition made by ld. AO and confirmed by ld CIT(A) 3.3 The ld. DR relied on the orders of the authorities below. 3.4 I have heard the rival contentions and perused the materials available on record. Brief facts of the case are that the assessee is an individual and derives income from Salary, Capital Gain and income from other sources. The assessee has filed return of income declaring total income at ͅ .....

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is noted from the records that the during the year under consideration the assessee had sold the Arakshna Patra having right to receive the allotment of land measure g 463 Sq. Mtr for ₹ 9,80,000/-. The assessee sold these lands in parts to various persons as under:- Name of Party Date of sales Area (In Sq. Mts) Sales value Value adopted by sub registrar Amit Agarwal 09.07.2010 68 1,60,000 2,60,260 Sumit Agarwal 09.07.2010 91 1,60,000 2,96,940 Chetanaya Prakash Goyal 09.07.2010 68 1,60,000 .....

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ssee's paper book. It is also noted that the assessee sold these rights by executing different sale deeds in favour of the above mentioned five persons totaling to ₹ 9.80 lacs. It will be worthwhile to mention the provisions of Section 50C of the I.T. Act whether the assessee s case is covered under this section or not. [Special provision for full value of consideration in certain cases. 50C. (1) Where the consideration received or accruing as a result of the transfer by an assessee of .....

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ction (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuat .....

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