TMI Blog2021 (2) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... truction of words. For the aforementioned reasons, in our considered opinion, the provisions of Section 50(c) are not applicable to the case of the assessee. In the result, the first substantial question of law is answered in the negative and in favour of the assessee. - I.T.A. NO.70 OF 2015 - - - Dated:- 2-2-2021 - HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE NATARAJ RANGASWAMY APPELLANT (BY SRI. CHYTHANYA K.K., ADV.,) RESPONDENT (BY SRI. K.V. ARAVIND, ADV.) JUDGMENT ALOK ARADHE J., This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2010-11. The appeal was admitted by a bench of this Court vide order dated 22.06.2015 on the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, finding of the Hon'ble ITAT that the subject land sold is held by the appellant as investment and not as stock in trade is perverse? (ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in holding that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question nor Power Of Attorney was executed in his favour. It is further submitted that M/s Namaste Exports Ltd. sold the land in question by three sale deeds dated 26.03.2007, 26.03.2007 and 01.03.2010 in parts in respect of lands measuring 8550 square feet, 9500 square feet, 21157 square feet for a total consideration of ₹ 3,26,37,550/-. It was further pointed out that in first two transactions viz., the sale deeds executed on 26.03.2007, the assessee was not a party to the deed, whereas, in the third transaction which was executed on 01.03.2010, the assessee was merely a consenting witness. Therefore, provisions of Section 50C are not applicable to the case of the assessee. It is also urged that Section 50C being a deeming provision requires strict interpretation and applies to the transferor of the land i.e., Namaste Exports and not to the assessee who is a consenting party and not transferor / co owner of the property. It is also argued that since, the assessee is only a consenting witness therefore, he cannot take recourse to Section 50C of the Act as he has no locus standi. It is also pointed out that Section 50C uses the expression 'capital asset' as being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has filed revised returns for 2008 09 but, these returns have been filed after survey operations i.e., 29.11.2010, the assessee himself has returned the income on earlier sale instances, returns were originally filed considering it as an investment and they were revised on 29.11.2010 i.e., after the survey and the assessee with regard to earlier two sale transactions has already offered the income under the head 'capital gains' but later on revised his stand are perverse. Therefore, the loss is a business loss and Chapter IV-E of the Act is not applicable. It is also contended that an asset is a stock in trade or capital asset is a question of law. Our attention has also been invited to Memorandum to Finance Bill, 2013 and it has also been contended that entries in the books of accounts are not inclusive to determine the nature of asset / transaction. It is also urged that the Assessing Officer cannot improvise his order and no profit can be recognized unless the land is fully sold and the profit can be determined only after completion of the venture. Alternatively, it is submitted that in the past years as well as for the current impugned year the assessee is ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is in the real estate business, the assessee is not prevented by any law to hold any investment. Therefore, the contention of the assessee to consider the land as stock in trade is incorrect and the same has rightly been rejected by the authorities. It is also contended that Section 50C of the Act would mandate adoption of consideration on the basis of guidance value prescribed by the State Government for the purposes of stamp duty as the consideration reflected by the assessee is much less than the guidance value provided by Government of Karnataka. The authorities have rightly adopted the value of land sold equal to value determined by Government of Karnataka for the purpose of stamp duty in terms of Section 50C of the Act. 8. It is also contended that assessee had entered into an agreement and had paid substantial amount towards consideration to the extent of 80% and the aforesaid payment of consideration has been acknowledged in the sale deed, which is evident from the recitals contained in the sale deed. Thus, rights have accrued in favour of the purchaser, which have been extinguished by the execution of the sale deed and the same would amount to transfer under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereinafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer , the value so adopted or assessed or assessable shall, for the purposes of Section48 be deemed to be the full value of the consideration received or accruing as a result of such transfer. Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer. Provided further that the first proviso shall apply only in a case where the amount of consideration, or apart thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed on or before the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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