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TMI Blog2018 (4) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... he Pr.CIT u/s 263 of I.T.Act. In this case, the assessee filed return of income declaring total income of Rs. 3,36,57,320/- and the assessment was completed u/s 143(3) of the I.T.Act accepting the income returned. Subsequently, the Pr.CIT has called for the records, examined and found that the assessee has transferred its land admeasuring 26.90 acres under development agreement dated 28.06.2010 for development of the land into plots with an understanding that 50% of plotted area (Schedule-2 Plots) in the layout has to be given to the developer towards development charges and 50% of plotted area (Schedule-1 Plots) would be retained by the assessee. In the return of income, the assessee admitted short term capital gains from transfer of said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. As per the understanding between the assessee and the developer, the cost of the development would be the market value 13.45 acres of land which was Rs. 4 lakhs per acre at the time of entering into the understanding. The assessee further stated that the stamp duty was initially agreed to be paid at Rs. 1,07,400/- by the registration department @1% for the entire 26.90 acres and the General Power of Attorney was executed on 28.06.2010 in the Sub Registrar Office. Since there was some confusion and lack of clarification, the registration was not done immediately and it took nearly two and half month's time to register the property on 09.09.2010. The property was given for development on 28.6.2010 and subsequent to the date of dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the Assessing Officer u/s 143(3) is erroneous and prejudicial to the interest of the revenue and directed the AO to modify the order passed u/s 143(3)adopting the stamp duty value of Rs. 3,90,58,800/- as consideration for transfer of subject property as per provisions of section 50C(1) of I.T.Act. With regard to the contention of the assessee that the stamp duty was collected on developed land at Rs. 3,83,000/- against the agreed stamp duty of Rs. 1,07,400/- which was the prevailing market rate at the time of original understanding, the Pr.CIT held that it has no relevance once the stamp duty is paid u/s 50C(1) of IT act. 4. Aggrieved by the order of the Pr.CIT, the assessee is in appeal before this Tribunal. During the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that though the AO has examined the computation of short term capital gains, the AO has not examined the issue with regard to the stamp duty value assessed by the Sub Registrar Office and applicability of provisions of Section 50C of I.T.Act. For a query from the Bench, the Ld.AR fairly conceded that the AO has not asked any question with regard to the applicability of Section 50C of I.T.Act in the assessment proceedings. In this case, the assessee has transferred the land for development and the registering authority has assessed the value of the land at Rs. 3,90,58,800/-. The assessee has not disputed the stamp duty value fixed by the Registering authorities. This issue was not examined by the AO and the assessment order is completely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to the transfer of land and retention of the land by the assessee and capital gains required to be taxed on that part of the land which was transferred to the developer. Therefore, prima facie, we hold that the Pr.CIT has rightly invoked the jurisdiction u/s 263. Since the issue with regard to the computation of short term capital gains required to be verified as discussed above., we remit the matter back to the file of the AO with a direction to verify the development agreement and assess the capital gains on the land transferred to the developer, but not on the entire land. Accordingly appeal of the assessee is allowed partly. 8. In the result, appeal of the assessee is partly allowed. The above order was pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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