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TMI Blog2017 (5) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... d was registered on 30.3.2008. The assessee has shown sale value at Rs. 1,81,92,371/-, whereas subregistrar office has valued the property for the purpose of stamp duty valuation at Rs. 2,39,78,200/-. Thus, the AO has observed that as per section 50C(1), value of the sale consideration would be deemed equivalent to the amount on which stamp duty was paid by the assessee while transferring the capital assets. In other words, the capital gain would be computed under section 48 by taking into consideration the value of the property determined for the purpose of stamp duty valuation. In this way, the ld.AO has made an addition of Rs. 57,85,829 (i.e. Rs. 2,39,78,200 minus Rs. 1,81,92,371). Appeal to the ld.CIT(A) did not bring any relief to the assessee. 4. Before us, the ld.counsel for the assessee contended that the assessee had entered into an agreement for sale of this land on 5th July, 2007 with M/s.Rajni Builders. The sale consideration as per MOU was determined at Rs. 1,81,92,371/- and MOU to this effect was executed which was notarized. Thus, contention of the assessee was that he has handed over possession to the purchaser and also received total sale consideration. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets the following amounts, viz. (a) expenditure incurred wholly and exclusively in connection with such transfer; and (b) the cost of acquisition of the asset and the cost of any improvement thereto. 8. Section 50C further provides that where the consideration received or accruing as a result of 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 for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall for the purposes of section 48, be deemed to be the full value of the consideration. In other words, full consideration mentioned in section 48 is to be replaced by the consideration on which value of the property was adopted for the purpose of payment of stamp duty. 9. Sub-Section (2) of section 50C further contemplates that in case assessee alleges that stamp duty valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer, then, the AO may refer the valuation of the capital asset to the Valuation Officer. At this stage, let us first deal with second fold of submission made by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument.] 11. We also deem it pertinent to take note of Section 53A of the Transfer of Property Act, 1882. It reads as under: "53A. Part performance.-Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that where there is an instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal has observed that such a date would be recognized if payment was made through account payee at the time of agreement. It is a specific observation of Tribunal in para-9. In other words, the Tribunal has observed that partial sale consideration was received through banking channel. In that background, the Tribunal has made observation. In the present case, agreement was entered into on 31.3.2008. Not a single paisa was paid on that date. It was transfer somewhere in the month of December, 2008. Agreement was without any consideration, but a promise of consideration was there. Therefore, the assessee cannot draw benefit from the order of the Tribunal in the case of Dharamshibhai Sonani Vs. ACIT (supra). As pleaded by the ld.CIT-DR, the assessee himself has recognized the sale in the Asstt.Year 2011-12 when deed was registered. Considering the cumulative effect of these factors i.e. non-payment of any consideration at the time of agreement, non-registration of agreement, recognisation of sale by the assessee himself in the Asstt.Year 2011-12, the amdnement in the Indian Registration Act and Other Related Law Amendment Act, 2001, we are of the view that the transfer cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the agreement, if vendor for some reason is not executing sale deed. Thus, by virtue of agreement to sell, some right is given to the vendee by the vendor. It is an encumbrance on the property and considering this aspect, the ld.AO should have remitted this issue to the file of DVO for determining fair market value on the date of transfer of land. The DVO will have to keep in mind the encumbrance over the property by virtue of sale agreement. It is also pertinent to note that validity or genuineness of the agreement has also to be decided because under the agreement, consideration was promised and not paid at the time of agreement. It was paid on 15.12.2008. All these factors are to be kept in mind by the DVO while determining the FMV of the property. Considering these aspects, we deem it appropriate to set aside the issue to file of the AO for re-adjudication. The ld.AO shall refer the matter to the DVO as contemplated under section 50C(2) of the Income Tax Act, 1961. The ld.DVO shall determine fair market value of the property on the date of sale deed, but keep in mind the encumbrance over the property by virtue of agreement. The ld.AO shall determine the long term capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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