TMI Blog2018 (9) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... ad, Accountant Member For the Revenue : Shri P.K. Mitra, Sr. DR For the Assessee : Shri C.P. Rawka,CA ORDER PER MANISH BORAD, AM. This appeal filed by the assessee pertaining to A.Y. 2009-10 is directed against the order of Ld. Commissioner of Income Tax(Appeals)-I, Indore, (in short CIT(A) ), vide appeal No. IT- 29/2014-15 order dated 29.01.2016 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(hereinafter called as the Act ) framed on 29.03.2014 by ITO-2(2), Indore. 2. Briefly stated the facts as culled out from the records are that the assessee is a Private Limited Company. Income of ₹ 25,48,889/- declared in the return of income filed on 30.9.2009. Subsequently on the basis of AIR information revealing that the assessee has sold immoveable properties worth ₹ 55,96,000/- and ₹ 37,76,000/- on 24.10.2008 and 23.01.2009 respectively and also made certain investment in mutual funds, the Ld.A.O in order to examine these transactions, issued notice u/s 148 of the Act on 4.5.2012 duly served upon the assessee. Necessary details as called for were filed. Apart from the additions for low gross profit as well as additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land was encroached by the persons and even after unsuccessfully trying to take possession of the property by resorting to legal action there was no option left with the assessee except to sale the property. 6. Per contra the Ld. Departmental Representative supported the orders of lower authorities at lower prices. 7. We have heard the rival contentions and carefully perused the records placed before us and gone through the decision relied by the Ld. Counsel for the assessee. 8. The sole issue raised by the assessee relates to the Short Term Capital Gain addition at ₹ 78,04,301/- made by the Ld.A.O by applying provisions of Section 50C of the Act thereby calculating the sale consideration of the industrial land sold by the assessee on the basis of the value adopted by the stamp valuation authorities. It is not disputed that sale deed have been registered and have been signed by the assessee. The only grievance of the assessee is that even when the objection was raised before both the lower authorities still the addition have been made u/s 50C of the Act even when as per the provisions of the Act the Assessing Officer should have referred the matter to the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not carry out any business activity on the said land, and sold the land very quickly and therefore it cannot be said that it was a business asset of the appellant or that there was distress sale. 8.2 From the material on record it is thus evident that the appellant has not shown any capital gains on the sale of the above two immovable properties. The contention of the appellant is that because of the non communication of the purchase and sale transaction by the representative accounting effect in the books of accounts were not made. This can hardly be considered as a valid reason for not showing the capital gains. It is an admitted position that the registered documents were in the name of the company and also part of the land still continued in the name of the company. Thus as per the legal provisions the ownership was of the appellant company. The contention that the land was business asset and hence provisions of section 5OC are not attracted is also not established. It is an admitted fact that the land in question is a capital asset and is not a part of the stock in trade of the appellant company and hence is covered by the provisions of section SOC. In the case of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to adopt the value assessed for the purpose of payment of stamp duty to be the full value of the consideration received or accruing as a result of such transfer. [Para 11] There are two deeming fictions created in section 5O and section 5OC. The first deeming fiction modifies the term 'cost of acquisition' used in section 48 for the purpose of computing the capital gains arising from transfer of depreciable assets where as the deeminq fiction created In section 5OC modifies the term 'full value of the consideration received or accruing as a result of transfer of the capital asset used in section 48 for the purpose of computing the capital gains arising from the transfer of capital asset being land or building or both. The deeming fiction created in section 5OC thus operates in a specific field which is different from the field which section 50 is applicable. It was thus not a case where any supposition had been sought to be imposed on other supposition of law. There are two different fictions created into two different provisions and going by the legislative intentions to create the said fictions, the same operate in different fields. The harmonious interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of assessee, in fact, the property appeared in the balance sheet of the assessee since the day of its acquisition in a auction _ ~ but assessee could not get its possession with clear title up to the date it was dispose off. The assessee has made a successful bid in a auction conducted by the Commercial Department which was attached against Commercial tax recovery against the defaulter owner of the property. The assessee got the title transferred by virtue of above auction. But to his surprise, he could not get the possession as the said property was under encroachment and dispute with other parties. The assessee unsuccessfully tried to take possession of the property by resorting to legal action against the encroacher who was holding adverse possession. When legal battle did not give fruitful results, the assessee had to made distress sale of the property. Your honour may appreciate that no property will fetch market value it carries dispute with it. In such circumstances, the Ld. Assessing Officer erred in assessing STCG by invoking Section. 50C . 11. The above submissions made by the assessee before the lower authorities reveals that the objection has been raised by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional evidences were rejected by Ld.CIT(A) only for the reasons that the assessee could not give any possible reason for being failed to provide the same during the assessment proceedings. From the perusal of the judgment referred and relied by the Ld. Counsel for the assessee we observe that the Hon ble High Court of Bombay in the case of Rallies India Ltd v/s CIT (Appeals) adjudicating the issue as to where the Assessing Officer fails to make enquiry u/s 55A by passing the assessment order, can the Commissioner of Appeals during the appellate proceedings before him can make such an enquiry by making reference to Departmental Valuation Officer either himself or direct the Assessing Officer to do so in terms of Section 250(4) of the Act and Hon ble Court holding in favour of the assessee taking support from the view taken by Hon ble Apex court in the case of CIT Vs Kanpur Coals Syndicate (1964) 53 ITR 225 wherein the Hon ble Apex Court held that it is undisputed that the power of CIT (Appeals) is co terminus with that of Assessment Officer, in fact the CIT (Appeals) can do what the Assessing Officer can do . 10. Similar view was also taken by the Hon'ble High of Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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