TMI Blog2018 (1) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income was processed u/s 143(1) on 31/03/2014. The case was selected for scrutiny under CASS and accordingly notices u/s 143(2) and 142(1) of the Act was issued. 2.1 Assessee is engaged in manufacturing cold rolled strips and started commercial production in 1972. Over the years, assessee suffered continuous business losses resulting in erosion of the entire net worth of the company. The matter was referred to Board of Industrial Financial Reconstruction (BIFR), which declared the company as sick industrial company and appointed Industrial Development Bank of India (IDBI) as the operating agency (OA). As per the direction of BIFR, IDBI constituted assets sale committee (ASC) comprising the following members: 1. Chairman, IDBI 2. Dy. Zonal Manager, Bank of India 3. Joint Secretary, Govt. of AP and the Assessee. The above committee identified the factory land of 6.46 acres belonging to the assessee located at Industrial Estate Moulali, Secunderabad as surplus land which can be sold. Accordingly, in order to fix the reserve price, IDBI obtained valuation report from V. Jagannath Rao Associates dated 07/12/2009, as per which, sale value was determined at ₹ 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s carried out by IDBI by way of public auction and the property was purchased by a government entity namely Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC). In this circumstances, I consider that it is too much to impute that APIIC paid unaccounted money. Further as per the sale deed dated 17-5-2011 the APIIC paid ₹ 12 crores to IDBI bank which is again a public sector undertaking. Therefore the entire transaction took place between two government entities where there is no scope for payment of any unaccounted money. In this back ground it is pertinent to mention the decision of Krishi Utpanna Bazaar Samitee Vs DCIT in ITA 2043/PN/2012 dtd 20-3-2014. The facts in this case were, the assessee Krishi Utpanna Bazaar Samitee was a state body of a Govt. of Maharashtra. It sold two properties in a public auction and received an amount of ₹ 91,00,000/- and ₹ 15,51,000/-. The stamp duty value of these properties were ₹ 26,14,,000/- and ₹ 26,14,000/- respectively, and the same value was adopted for 5OC purpose. While adjudicating the issue, the Hon'ble Pune Tribunal observed that the Govt. Maharashtra issued a circular dated 30/06/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the company located at Industrial Estate, Moula Ali, Secunderabad. In order to fix the reserve price, IDBI obtained valuation report from the Registered Valuer i.e. Mr. V. Jagannath Rao and Associates on 07/12/2009, as per which, the registered value was at ₹ 8.02 crores. ASC invited tenders by advertising in the leading news papers. The Committee has received highest bidder from APIIC i.e. public undertaking of Govt. of AP for an amount of ₹ 12 cores. The same was finalized and the factory land was sold to APIIC vide sale deed dated 17/05/2011. AO has invoked section 50C on the above transaction by merely relying on the SRO value for the purpose of stamp duty. In our considered view, AO cannot adopt SRO value u/s 50C for the following reasons: a) Sale was made by ASC Committee wherein the assessee is one of the Member as Joint Secretary. b) Assessee was never a decision maker in the above process of sale and always remain as a sick industrial undertaking under distress for revival. c) The purchaser is another public sector undertaking of Govt. of AP. d) The operating agency i.e. IDBI has obtained valuation report from the registered valuer determining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital asset being land or building or both, is lower than the value adopted or assessed by any authority of State of Government for the purposes of payment of stamp duty in respect of such transfer, then the value so adopted or assessed shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for the purposes of computing capital gain in terms of section 48 of the Act. In the present case, the Revenue has sought to justify invoking of section 50C of the Act primarily on the ground that the value adopted by the Stamp Valuation Authority for the purposes of payment of stamp duty in respect of transfer of the two properties in question is higher than the actual consideration accruing to the assessee as a result of their sale. The defence of the assessee is that the sale consideration stated in the sale-deed is liable to be taken as the fair market value even for the purposes of payment of stamp duty in the present case because the sale/transfer in the present case is by way of a public auction conducted by a statutory body. Pertinently, the assessee is a statutory body incorporated under the provisions of the Maharashtra Agricultural P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value as defined in Section 2 [na] of The Bombay Stamp Act, 1958 in respect of such property should be restricted to the value declared in sale certificate only for registration of such document. Therefore if such property is / subsequently sold, the value as per ready recknoer should be taken for that transaction. 10. In the present case, assessee before us is a statutory body and the sale of properties in question has been made through the route of Public auction, which is not in dispute. The CIT(A) has also reproduced the submissions of the assessee before him which inter-alia contain averments that the sale of the properties was conducted in Public auction, after seeking necessary permissions from the Director of Panan of Maharashtra State. Factually speaking, in our considered opinion, the impugned transfers effected by the assessee by way of public auction fall within the purview of the Circular issued by Government of Maharashtra dated 30.06.2005 (supra) for the purposes of payment of stamp duty. In terms of the said Circular, the highest price in the sale auction is considered to be the fair market value for the purposes of payment of stamp duty. This would mean ..... X X X X Extracts X X X X X X X X Extracts X X X X
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