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TMI Blog2021 (12) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing no.3273 made with Sub-Registrar Office, Bavla, Ahmedabad. For the purpose of stamp duty valuation, this property was valued at Rs. 5,82,39,975/-. On the strength of this information, he recorded reasons and reopened the assessment by issuance of notice under section 148 of the Act on 16.4.2015. The ld.AO has passed the assessment order whereby he made an addition of Rs. 5,52,03,376/-. The ld.AO recorded a finding that this property was purchased on 18.9.2010 for a consideration of Rs. 24 lakhs and sold on 28.9.2011 disclosing the sale consideration of Rs. 80.00 lakhs. The said deed was registered on 29.9.2011. The ld.AO further observed that the assessee has paid a sum of Rs. 6,36,599/- for converting this land to non-agriculture land. Thus, he took cost of acquisition at Rs. 30,36,599/-. According to the assessee, short term capital gain comes to Rs. 49,63,401/- i.e. Rs. 80,00,000/- minus Rs. 30,36,599/- (sale value minus cost of property). However, the AO took sale consideration at Rs. 5,82,39,975/- with the aid of section 50C of the Act. 4. Dissatisfied with computation of the capital gain, the assessee carried the matter in appeal. He has challenged reopening of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of which payment of Rs. 19,30,000/- was received on 16th September, 2010, Rs. 10,00,0007- was received on 13th October, 2010 and Rs. 25,00,000/- was received on 26th February, 2011 in support of such payment Appellant has submitted copy of bank statement and on verification of the same it is noticed that the above cheques have been realized on such dates. On this basis Appellant has argued that part payment out of agreed consideration was received by Appellant hence agreement to sell executed with buyer of the property was acted upon in substance. The Appellant has also stated that even purchaser party has paid stamp duty of Rs. 3,96,0007- payable on agreed consideration of Rs. 80,00,000/-which is also prevailing jantri value of the property. This fact is also confirmed from the copy of certificate No.IN-GJ16516924342402J dated 31.03.2011, issued under the seal of Sub- Registrar, Bav!a, Govt. of Gujarat. These facts were also admitted by authorized person of buyer of the property and on this basis, Appellant contended that consideration of above property is Rs. 80,00,000/- and not Rs. 5,82,39,975/-. The delay in registration of sale deed was only on the ground that Appellant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque before date of agreement for transfer. The Appellant has also contended that such amendment is retrospective amendment for which reliance is placed on following decisions; (i) Ahmedabad ITAT in case of Dharamshibhai Sonani in ITA No. 1237/Ahd/2Q13 dated 3rd September, 2016 * (ii) Vizang Tribunal in case of Chalasani Naga RatnaKumari vs. /TO vide ITA No: 639A/Vizag/2013 dated 23/12/2016 (iii) Ahmedabad ITAT in case of Hansaben Bhaulabhai Prajapati in ITA No. 2412/Ahd/2016 dated 31/10/2017 5.1 The AO in the Remand Report has contended that Appellant has remained non-compliant during Assessment Proceedings in current year as well as in A.Y. 2010-11 hence additional evidences should not be admitted. The AO has also contended that agreement to sell with possession submitted by Appellant shows part payment out of total consideration of Rs. 80,00,000/- but Appellant has not submitted such document in Assessment Proceedings and even as per information gathered by her, document was notarized by Kanubhai J. Patel who has made criminal offence for which she has submitted order of Hon'ble Gujarat High Court. In rejoinder Appellant has mainly relied upon written submission fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and order was passed on 15th March, 2016 hence even new consultant had no sufficient time for making compliance in Assessment Proceedings. It is also observed that Remand Report was also obtained from AO and her contentions are also considered while adjudicating the present issue. The AO in the Remand Report has contended that Appellant has even remained non-compliant even in Assessment Proceedings for A.Y. 2010-11 hence additional evidence should not be admitted for present year. However, it is observed that Assessment Order for A.Y. 2010-11 was passed under Section 143(3) of the Act and no additions have been made in returned income which proves that Appellant has fully complied with details during Assessment Proceedings for A.Y. 2010-11. The Hon'ble Gujarat High Court in the case of CIT V/s Kamlaben Sureshchandra Bhatti [2014] 44 taxmann.com 459 has held as under: Section 251 of the Income Tax Act, 1961, read with Rule 46A of the Income Tax Rules, 1962 - Commissioner (Appeals) - Powers of (Power to admit additional evidence) - In course of assessment, notice of hearing issued by Assessing Officer was received by Assessee on date of hearing itself - Assessee thus could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l sale deed executed with buyer of the property, appellant has received Rs Rs. 19,30,000 on 16th September, 2010, Rs. 10,00,000/- on 13th October, 2010 and Rs. 25,00,000/- on 26th February, 2011 and such amounts are duly reflected in bank statement of appellant. These are credible independent evidences not amenable to manipulation by the appellant and these facts are not disputed by AO in the remand report. These facts clearly prove that appellant has received consideration for part performance of contract on or before 31st March 2011 wherein Old JANTRI was prevailing. The Jantri Value was revised on 18th April 2011. If appellant has not entered into any agreement to sale, how he would receive such consideration on various dates as claimed. The appellant has also submitted Stamp Duty certificate issued by the Government of Gujarat which is part of sale deed executed with buyer of the property. As per such document, purchasing party i.e. Ashwa InfraconPvt Ltd has paid stamp duty amounting to Rs. 3,96,000/-computed on the basis of the Jantri value on 31st March 2011 which is as per JANTRI value prevailing in the financial year in which agreement to sale was executed. The above docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orized person has categorically admitted that buyer has entered into agreement to sale (banakhat) with appellant for purchase of property for Rs. 80,00,000/-, paid stamp duty on 31st March 2011 considering value of property at Rs. 80,00,000/- and paid additional stamp duty subsequently because sale deed was delayed for final registration. The relevant observation of AO from assessment order is as under: "10. Shri Dipal Shah, CA and AR of the assessee again attended the office of the undersigned and case discussed with him. He informed the undersigned that M/s AshwalnfraconPvt Ltd had made agreement with Shri Aiav J Mehta to purchase the impugned immovable property from Aiav J Mehta for a consideration of Rs. 80,00,000/- with condition that he should convert the said land from agricultural to non agriculture and the consideration agreed upon includes the payment required to be made to the government for such conversion. Accordingly Shri Ajay J Mehta made the required payment for conversion the land from agriculture to non agriculture. Accordingly sale deed prepared and purchaser i.e. M/s Ashwalnfracon Pvt Ltd made payment of Rs. 3,96,000/- towards stamp duty charges on 31/03/2011. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . falling between the date of registered agreement coming on 02.02.2011 and sale deed dated 13,07.2011. The Revenue's case on the other hand is that the assesses had never transferred the asset in question before the above jantri price increase. We find in this factual backdrop that a co-ordinate bench decision in DharamshibhaiSonani vs. ACIT ITA No.1237/Ahd/2013 decided on 30.09.2016 takes note of second proviso to Section 50C inserted by the Finance Act, 2016 w.e.f. 01.04.2017 to be curative and having retrospective effect as under 5. We notice in view of all these developments that the assessee has received his earnest money in furtherance to the registered sale agreement dated 02.02.2011 on 10.03.2011. Relevant cheques details already find mention in ClT(A)'s order page 9. We observe in these facts that the registered agreement followed by receipt of advance money by banking channel form sufficient reasons to attract the above former proviso to Section 50C of the Act stipulating in very clear terms that where the date of the agreement fixing the amount of consideration and the date of registration regarding transfer of the capital asset in question are not the same, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisely what the learned counsel has prayed for. In his detailed written submissions, he has made out of a strong case for the amendment to Section 50C being treated as retrospective and with effect from 1st April 2003. The plea of the assessee is indeed well taken and deserves acceptance. What follows is this. The matter will now go back to the Assessing Officer. In case he finds that a registered agreement to sell, as claimed by the assessee, was actually executed on 29.6.2005 and the partial sale consideration was received through banking channels, the Assessing Officer, so far as computation of capital gains is concerned, will adopt stamp duty valuation, as on 29.6.2005, of the property sold as it existed at that point of time. In case the assessee is not content with this value being adopted under section 50C, he will be at liberty to seek the matter being referred to the DVO for valuation, again as on 29.6.2005, of the said property. As a corollary thereto, the subsequent developments in respect of the property sold (e.g.the conversion of use of land) are to be ignored.lt is on this basis that the capital gains will be recomputed. With these directions, the matter stands rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ru Anupama Versus Assistant Commissioner of Income Tax, Circle-2 (1) Vijayawada (No.- ITA No. 556/Vizag/2008, & ITA No. 557/Vizag/2008) in which it was held that: "6. In the cases before us also, there is no dispute that the assessees herein entered into sale agreements on 04-6-2005 and the sale value fixed on that date was equivalent to the SRO rates fixed for stamp duty purposes. The conveyance deed was registered on 25.8.2005, i.e, within a period of three months. Though the SRO rates had been raised upwards on that date, yet, as observed in the above cited case, the assessees herein have fulfilled a contractual obligation, which they are bound by law to carry out. Since the process of sale has been initiated from the date of sale agreement, we have held in the above cited case that the applicability of provisions of section 50C should be looked at only on the date of sale agreement. In the instant cases, the question of adoption of a higher value by invoking the provisions of section 50C on the date of sale agreement does not arise as the sale value fixed by the assessees was equivalent to the SRO value for stamp duty purposes. ITAT Bangalore in the case of M/s. Bharathi De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement. The assessee has filed a certificate obtained from the Joint Sub Registrar, Visakhapatnam, regarding market value of the impugned property as on the date of the sale agreements. The said certificate was not produced before the tax authorities. As already held that the provisions of section 50C should be applied of the impugned sale transactions as on the date on which sale agreements were entered into. Since the applicability of section 50C as on the date of sale agreements is required to be examined by the AO, we set aside the issue to the file of the AO with a direction to compute the capital gains on sale of impugned properties after applying the provisions of section 50C as on the date of sale agreements. Accordingly, the order of Ld.CIT(A) is reversed. - . Considering the above facts and relying upon various decisions referred (supra), it is my opinion that the AO was. not justified in adopting JANTRI value prevailing as on the date of registering the sale deed as correct market price and re-computing capital gain u/s 50C of the Act. Thus, addition made by AO considering short term capital gain computed by AO for Rs. 5,52,07,376/- is hereby deleted and AO is direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable 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 a part 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 date of the agreement for transfer: ..... ..... ... 8. These provisions have been entered in the section with effect from 1.4.2017. A perusal of these provisions would indicate that if the date of registration for transfer of capital assets, and date of agreement are different, and valuation of the property for the purpose of payment of stamps also differs on these dates, then stamp valuation on the date of agreement is to be deemed as full consideration for the purpose of section 50C of the Act. The only caveat provided in this regard has been contemplated in second provisos that payment or part payment of consideration must be through bank channel because that can avoid manipulation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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