TMI Blog2022 (12) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 53A of the TP Act are not applicable. There was no deemed transfer. In case in hand the matter has to be considered for a charging section 45 read with Section 2(14) of the Act and the relevant is Section 47 of the Registration Act 1908, whereby it is provided that registered document shall operate from the date of its execution. It is the date of the execution of the registered deed and on that date alone, the title to property passes. When section 2(47) of the Act specifically deals with sale‟ under clause (i) to section 2(47) and of the agreement to sale‟ of property under clause (v) then the assessee cannot plead of being covered under clause (ii) of section 2(47) dealing with the extinguishment of any right. First proviso of section 50C(1) provides that where the date of agreement fixing the value of consideration for transfer of the assets and the date of registration of such transfer of asset not the same, then the stamp value may be taken as the value adopted or assessed or assessable by any authority of a state Govt. for the purpose of payment of stamp duty in respect of such transfer on the date of agreement. Provision to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the said show cause notice, the appellant‟s AR filed return of income declaring total income of Rs. 40,200/- and agricultural income of Rs. 95,200/-. To scrutinize the return, notices u/s 143(2) and 142(1) were issued. The Ld. AO observed that the appellant had sold land and the same was in the nature of an industrial plot and hence, Long Term Capital Gain was chargeable. On the basis of the available facts, LTCG was assessed at Rs. 1,09,69,234/-. Thus, the total income was computed at Rs. 1,10,09,434/- and agricultural income of Rs. 95,200/-. 3. The ld CIT(A) upheld the addition while holding in para No. 5.4 as under:- 5.4 Decision This ground is against the assessment of capital gain of Rs. 1,09,69,234/-. In this regard, it has been explained that though in the sale deed the land has been declared to be an industrial plot, it was actually an agricultural land. It has also been explained that in the case of Shri Jitendra Kumar Singh, Ld. CIT (A) Ghaziabad had examined the facts and held that the sold land was agricultural in nature and agricultural activities were being carried out on the date of sale. Therefore, it has been argued that no capital gain can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature and hence would apply with retrospective effect. Therefore, it can be said that for the purpose of computing the full value of consideration, the value assessable by the stamp valuation authority on the date of agreement to sell should be taken. Here, we must note that part of the consideration (Rs. 60,00,000/-) was paid by cheque on the date of agreement. Thus, the most necessary condition as prescribed for applying the aforesaid proviso has been fulfilled. Now, we have to see what would be the value assessable by the stamp valuation authority on the date of the agreement. It is noted that the land use was changed after the agreement was signed. Therefore, on the date of agreement, land use was still agricultural only. This is also apparent from a perusal of the revenue records. Hence, the stamp value assessable on the agreement date, would be the circle rates applicable to agricultural lands for that year. It has been found that the circle rates for agricultural land prevailing during the F.Y. 2008-09 were Rs. 7,00,000/- per Bigha which converted Rs. 92,72,000/- per hectare. During the year under consideration 1.685 hectares of land was sold and the value of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten submission on behalf of the assessee is placed on record with a request to adjudicate the appeal on the basis of written submission. On behalf of the assessee it has been submitted in written submission that plot has treated as industrial plot only for the purpose of sale deed as purchaser has purchased an agricultural land for industrial purpose. It has been submitted that the ld CIT(A) completely ignored the fact that land sold was an agricultural land at the time of execution of the agreement to sell duly signed and registered on 02.07.2008 and the use of land sold was changed subsequently on 10.07.2008 and treated it as industrial land for the purpose of sale deed executed on 18.09.2008. It was submitted that the Tax Authorities below should have considered the agreement to sale dated 02.07.2008 as the relevant date to consider the nature of land to be an agricultural land. In this context reliance is placed on the judgment of Allahabad High Court CIT Vs. Smt. Sanjeeda Begum and the coordinate bench decision in case of ITO Vs. Jitender Kumar, ITA No. 3909/Del/2015. 6. It has been submitted that the ld Tax Authorities below have fallen an error in not considering that fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to industrial land at the date of Sale deed. 9. In this context this bench takes note of clause (v) of section 2(47) of the Act which provides that if a transfer‟ involves handing over of possession of any immovable property in part performance of a contract of the nature referred to in section 53A of the TP Act 82 that shall be included in the definition of transfer of capital asset. In the case in hand although fact of registration of agreement to sale is not disputed however, the possession was not handed over. Thus, strictly speaking provisions of section 53A of the TP Act are not applicable. There was no deemed transfer. 10. Further, when section 2(47) of the Act specifically deals with sale‟ under clause (i) to section 2(47) and of the agreement to sale‟ of property under clause (v) then the assessee cannot plead of being covered under clause (ii) of section 2(47) dealing with the extinguishment of any right. 11. Then reference needs to be made to the Hon‟ble Bombay High Court judgment in Pr. CIT Vs. Talwalkars Fitness Club in ITA 589/2016 dated 29.10.2018 wherein Hon‟ble High Court had upheld the order of Mumbai Bench that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and further observed in light of the said definition that one can come to the conclusion that some right in respect of the capital asset in question had been transferred and that such right with respect to the capital asset had been extinguished, after execution of the agreement to sale. The Hon‟ble Supreme Court also observed that, no doubt, such contractual right can be surrendered and neutralized by the parties by subsequent contract or conduct. But, such was not the case on hand. The Hon‟ble Supreme Court also noted that the sale deed could not be executed for the reason that the assessee had been prevented from dealing with the residential house by an order of the competent Court. The Hon‟ble Supreme Court, in view of such peculiar facts of the case and looking to the definition of transfer u/s.2(47) of the Act, was of the view that the assessee was entitled to relief u/s.54 of the Act. 14. This judgment, is contrary to what has been canvassed by this bench, earlier in para 11 and 12 above, but what is material is the fact that in this judgement, Hon‟ble Supreme Court does not lay down a blanket proposition that without there being anything else, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assets and the date of registration of such transfer of asset not the same, then the stamp value may be taken as the value adopted or assessed or assessable by any authority of a state Govt. for the purpose of payment of stamp duty in respect of such transfer on the date of agreement. Provision to section 50C(1) provides that the provision of first proviso to section 50C(1) shall apply only in 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 of use of electronic clearing system through a bank account on or before the date of the agreement for transfer of the asset.This makes it crystal clear that the Act also intends to take the date of sale deed to be relevant for purpose of ascertaining the nature of assets and only as exception u/s 50C(1), the agreement to sell is relevant. 17. Thus, for the purpose of determining the nature of capital assets and consequent calculation of capital gains, the relevant date would be when the right, title or interest got extinguished in vendor and in substance same vested in the vendee. As the case is covered by Section 2(47)(i) of the Act, the relevant da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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