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TMI Blog2004 (1) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... e undisputed factual matrix giving rise to the present petition is that under an agreement dated November 24,1993, the petitioner agreed to sell his property; being residential Flat No.241, Urvashi, L. Jagmohandas Road, Bombay-400 006, along with car parking space (hereinafter referred to as "the suit premises" for short), for a consideration of Rs. 3,70,00,000. It was, inter alia, agreed between the parties that out of the aforesaid amount of consideration Rs. 3,70,00,000, a sum of Rs. 35,00,000 would be paid by the vendee to the petitioner and the balance amount of Rs. 3,35,00,000 shall be paid within 48 hours after the receipt of "no objection certificate" from the Income-tax Department and/or from the housing society or March 15, 1994, whichever is later. The transfer charges of the society were to be borne by the vendor and vendee in the ratio of 50:50. In pursuance of the aforesaid agreement, the petitioner and the said purchasers, furnished to the respondents the statement of transfer of immovable property as required by law under section 269UC of the Act in Form No.37-I as prescribed. The petitioner and the said purchasers were served with the show cause notice dated Janua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to discounting of value had also been upheld by this court as well as the apex court in a series of judgments. He relied upon decision of this court in the case of Smt. Vimla Devi G. Maheshwari v. S.K. Laul [1994] 208 ITR 734 and tried to support the method of discounting and application thereof to the present case. So far as retention of the amount of Rs. 5,00,000 by the appropriate authority from the apparent consideration being 50 per cent. share of the transfer fee payable by the vendor is concerned, reliance is placed on the affidavit filed by the respondents dated October 16,2003, wherein the contention raised by the petitioner has been fairly accepted by the respondents except for entitlement of the petitioner to claim interest thereon. With the aforesaid pleadings on record, Mohan Jaykar was heard on behalf of the petitioner whereas Shri R. Asokan advanced his submissions on behalf of the respondents. Submissions: Shri Jaykar, for the petitioner at the outset, made it clear that the petitioner-transferor is not challenging the validity of the provisions of Chapter XX-C of the Act save and except the action of the respondents to the extent it has reduced apparent conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,00,000 was to be deferred by 111 days from the date of agreement and, therefore, the amount of apparent consideration payable to the petitioner was liable to be reduced at 8 per cent. per annum. The competent authority, thus worked out the apparent consideration payable to the petitioner in the sum of Rs. 3,62,25,050. Shri Jaykar did not dispute that the authorities are entitled to apply the provisions of discounting if the payment is not to be made on the date of agreement but on any other future date. In other words, learned counsel submits that whether or not the concept of discounting is applicable needs to be decided with reference to the date of actual payment depending upon the facts of each case. The deduction is permissible only with reference to the period commencing from the date of payment prescribed under the agreement. He further explains that if payment under the agreement is to be received subsequent to the date of actual payment made by the Income-tax Department, then the principle of discounting is not applicable because, in his submission, discounting is primarily a rebate for early payment. It is applicable only in the event of early payment since it is in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is entitled to determine the discounted value with reference to the date of agreement and tried to refute the contentions of the petitioner-transferor that the relevant date should be date of payment and urged that the same cannot be accepted. In his submission, this issue is no longer res integra in view of the Division Bench decision of this court in the case of Smt. Vimla Devi G. Maheshwari v. S.K. Laul [1994] 208 ITR 734 and subsequent judgment of this court in the case of Miss Kamla Khushaldas Teckchandani v. O.D. Mohindra [1999] 240 ITR 796. He thus contends that the concept of discounting was rightly applied and the amount of apparent consideration was correctly determined by the competent authority. Hence, this petition is liable to be dismissed. In rejoinder, Shri Jaykar, while reiterating his earlier submissions, submitted that the cases of Smt. Vimla Devi G. Maheshwari v. S.K. Laul [1994] 208 ITR 734 (Bom) and Miss Kamla Khushaldas Teckchandani [1999] 240 ITR 796 (Bom) have no application to the facts of the case in hand. According to him, the submissions canvassed by him in this case are concluded by another judgment of the Division Bench of this court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing after the date of such agreement for transfer, the value of the consideration payable after such date shall be deemed to be the discounted value of such consideration, as on the date of such agreement for transfer, determined by adopting such rate of interest as may be prescribed in this behalf." The entire controversy revolves round the proper reading of the expression as set out hereinabove. For the sake of convenience, it would be advantageous to dissect the latter part of the expression and then it will read as follows: "(a) and where the whole or any part of the consideration for such transfer is payable on any date or dates falling after the date of such agreement; (b) the value of the consideration payable after such date shall be deemed to be the discounted value of such consideration; (c) as on the date of such agreement for transfer, determined by adopting such rate of interest as may be prescribed in this behalf." The plain reading of the definition of "apparent consideration" makes it clear that where the consideration for transfer is payable subsequent to the date of the agreement, then the value of the consideration payable after the date of the agreement i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he date of payment mentioned in the agreement, in that event discounting would not be attracted. In this case, on the facts of the case, the consideration was payable under the agreement on March 15,1994, whereas the payment of the balance consideration of Rs. 3,35,00,000 was made by respondent No.1 on April 25,1994, obviously, after the date of payment mentioned in the agreement. If that be so, the concept of discounting as understood could not have been invoked by the competent authority. As a matter of fact, the petitioner would have been entitled to interest on delayed payment from the Department though it is not open for him to claim such interest for want of statutory provisions under the Act. It is thus clear that on the facts, the present case is squarely covered by the Division Bench of this court in the case of Shrichand Raheja [1995] 213 ITR 33. As a matter of fact, the issue as to whether the discounted value should be determined with reference to the date of agreement, or payment, in our opinion, does not arise in the facts of the present case. It is, therefore, unnecessary to go into that question. The cases of Vimla Devi [1994] 208 ITR 734 (Bom) and/or Kamla Khushald ..... X X X X Extracts X X X X X X X X Extracts X X X X
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