ITO, Ward-3(3), Hyd, Hyderabad V. Southern Steel Ltd., Hyd, Hyderabad

ITA 1220/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2410 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-09-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NARSAMMA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Cost of acquisition; Fair market value; Valuation report
• Section: 50C; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1220/HYD/2016 ASSESSMENT YEAR: 2012-13 INCOME-TAX OFFICER, WARD 3(3), HYDERABAD VS. SOUTHERN STEEL LTD., HYDERABAD. PAN AADCS 4020 L (APPELLANT) (RESPONDENT) REVENUE BY : SHRI S. NARSAMMA ASSESSEE BY : SHRI A.V. RAGHURAM DATE OF HEARING : 18-09-2017 DATE OF PRONOUNCEMENT : 10-11-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (A) - 3, HYD ERABAD, DATED 21-06-2016 FOR AY 2012-13. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME FOR AY 2012-13 ON 26/09/2012 ADMIT TING INCOME OF RS. NIL. THE RETURN OF INCOME WAS PROCESSED U/S 143 (1) ON 31/03/2014. THE CASE WAS SELECTED FOR SCRUTINY UNDE R CASS AND ACCORDINGLY NOTICES U/S 143(2) AND 142(1) OF THE AC T WAS ISSUED. 2.1 ASSESSEE IS ENGAGED IN MANUFACTURING COLD ROLLE D STRIPS AND STARTED COMMERCIAL PRODUCTION IN 1972. OVER THE YEA RS, ASSESSEE SUFFERED CONTINUOUS BUSINESS LOSSES RESULTING IN ER OSION OF THE ENTIRE NET WORTH OF THE COMPANY. THE MATTER WAS REFERRED T O BOARD OF INDUSTRIAL FINANCIAL RECONSTRUCTION (BIFR), WHICH D ECLARED THE 2 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. COMPANY AS SICK INDUSTRIAL COMPANY AND APPOINTED IN DUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) AS THE OPERATING A GENCY (OA). AS PER THE DIRECTION OF BIFR, IDBI CONSTITUTED ASSETS SALE COMMITTEE (ASC) COMPRISING THE FOLLOWING MEMBERS: 1. CHAIRMAN, IDBI 2. DY. ZONAL MANAGER, BANK OF INDIA 3. JOINT SECRETARY, GOVT. OF AP AND THE ASSESSEE. THE ABOVE COMMITTEE IDENTIFIED THE FACTORY LAND OF 6.46 ACRES BELONGING TO THE ASSESSEE LOCATED AT INDUSTRIAL EST ATE MOULALI, SECUNDERABAD AS SURPLUS LAND WHICH CAN BE SOLD. ACC ORDINGLY, IN ORDER TO FIX THE RESERVE PRICE, IDBI OBTAINED VALUA TION REPORT FROM V. JAGANNATH RAO & ASSOCIATES DATED 07/12/2009, AS PER WHICH, SALE VALUE WAS DETERMINED AT RS. 8.02 CRORES. SUBSEQUENT LY, NEWS PAPER ADVERTISEMENTS WERE GIVEN IN LEADING NEWSPAPERS LIK E BUSINESS STANDARDS, THE HINDU, EENADU ON 12/05/2010 FOR INVI TING TENDERS FOR SALE OF FACTORY LAND. THE COMMITTEE RECEIVED VARIO US TENDERS AND THE TENDERS WERE OPENED BY ASC COMMITTEE ON 26/06/2010. IT HAS RECEIVED HIGHEST BID FROM ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LTD. (APIIC), WHICH IS A PUBLIC SECTOR UNDERTAKING OF GOVT. OF AP FOR AN AMOUNT OF RS. 12 CRORES. AS PER THE DE CISION OF ASC COMMITTEE, ASSESSEE TRANSFERRED FACTORY LAND TO API IC VIDE SALE DEED DATED 17/05/2011. 2.2 ASSESSEE HAS CALCULATED LONG TERM CAPITAL GAINS FROM THE SALE OF LAND AND CLAIMED SET OFF OF BROUGHT FORWARD UNA BSORBED DEPRECIATION AND CURRENT YEARS LOSS AND DECLARED T HE NET TAXABLE INCOME AT NIL. 2.3 ALTHOUGH, AS PER SALE DEED DATED 17/05/2011, TH E SALE CONSIDERATION RECEIVED BY ASSESSEE WAS RS. 12 CRORE S, FOR THE PURPOSE OF STAMP DUTY, THE MARKET VALUE OF THE PROP ERTY WAS ASSESSED BY SUB-REGISTRAR, MALKAJGIRI AT RS. 21,88, 97,000/-. THEREFORE, THE AO HAD INVOKED PROVISIONS OF SECTION 50C AND ADOPTED 3 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. SALE CONSIDERATION AT RS. 21,88,97,000/- AS AGAINST RS. 12 CRORES ADOPTED BY THE ASSESSEE AND ARRIVED AT LTCG AT RS. 11,29,46,806/- AND MADE THE ADDITION ACCORDINGLY, AFTER ADJUSTING THE INDEXED COST OF ACQUISITION, REJECTED THE CONTENTION OF THE ASSESSE E THAT THE TRANSACTION WAS UNDER DISTRESS SALE AND TRANSFERRED TO THE CORPORATION CONTROLLED STATE GOVT. 3. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE FACTS OF THE CASE, DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE RELEVANT INFORMATION ON THE RECORD. THE MOOT POINT IN THIS CASE IS WHETHER SEC. 5OC CAN BE INVOKED WHEN THE PURCHASER IS A GOVERNMENT UNDERTAKING I.E, ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMIT ED (APIIC). IN THE REAL ESTATE BUSINESS IT IS PREVALENT THAT THE S UBSTANTIAL PART OF THE CONSIDERATION IS UNACCOUNTED. IN ORDER TO TA X THIS UNACCOUNTED PORTION OF CONSIDERATION DEEMING PROVIS ION WAS INTRODUCED AS SECTION 5OC WHEREIN WHEN THE CONSIDER ATION IS LESS THAN STAMP DUTY VALUE, SUCH STAMP DUTY VALUE I S TO BE TREATED AS FULL VALUE CONSIDERATION FOR THE PURPOSE OF CAPITAL GAIN. HOWEVER, IN THE INSTANT CASE THE SALE TRANSACTION W AS CARRIED OUT BY IDBI BY WAY OF PUBLIC AUCTION AND THE PROPER TY WAS PURCHASED BY A GOVERNMENT ENTITY NAMELY ANDHRA PRAD ESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED (APII C). IN THIS CIRCUMSTANCES, I CONSIDER THAT IT IS TOO MUCH TO IM PUTE THAT APIIC PAID UNACCOUNTED MONEY. FURTHER AS PER THE SA LE DEED DATED 17-5-2011 THE APIIC PAID RS.12 CRORES TO IDBI BANK WHICH IS AGAIN A PUBLIC SECTOR UNDERTAKING. THEREFO RE THE ENTIRE TRANSACTION TOOK PLACE BETWEEN TWO GOVERNMENT ENTIT IES WHERE THERE IS NO SCOPE FOR PAYMENT OF ANY UNACCOUNTED MO NEY. IN THIS BACK GROUND IT IS PERTINENT TO MENTION THE DECISION OF KRISHI UTPANNA BAZAAR SAMITEE VS DCIT IN ITA 2043/P N/2012 DTD 20-3-2014. THE FACTS IN THIS CASE WERE, THE ASS ESSEE KRISHI UTPANNA BAZAAR SAMITEE WAS A STATE BODY OF A GOVT. OF MAHARASHTRA. IT SOLD TWO PROPERTIES IN A PUBLIC AUC TION AND RECEIVED AN AMOUNT OF RS.91,00,000/- AND RS. 15,51, 000/-. THE STAMP DUTY VALUE OF THESE PROPERTIES WERE RS. 26,14 ,,000/- AND RS.26,14,000/- RESPECTIVELY, AND THE SAME VALUE WAS ADOPTED FOR 5OC PURPOSE. WHILE ADJUDICATING THE ISSUE, THE HON'BLE 4 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. PUNE TRIBUNAL OBSERVED THAT THE GOVT. MAHARASHTRA I SSUED A CIRCULAR DATED 30/06/2005 WHEREIN IT WAS STATED FOR THE PURPOSE OF STAMP DUTY THE VALUE TO BE ADOPTED IS THE AMOUNT RECOVERED IN PUBLIC AUCTION. THE FACTS IN THE ABOVE CASE ARE IDENTICAL TO THAT OF APPELLANT CASE. KEEPING IN VIEW THE ABOVE D ISCUSSION WHEN THE PROPERTY WAS PURCHASED BY THE GOVERNMENT E NTITY IN PUBLIC AUCTION FOR AN AMOUNT OF RS.12 CRORES. THE A SSESSING OFFICER CANNOT ADOPT THE SALE CONSIDERATION AT RS.21,88,97,000/- AND INVOKE SECTION 5OC. IN SUCH CIRCUMSTANCES WHEN THE CONSIDERATION ACTUALLY RECEI VED WAS RS.12 CRORES AND THERE IS NO SCOPE FOR PAYMENT OF A NY UNACCOUNTED MONEY, THE PROVISIONS OF SECTION 5OC CA NNOT BE INVOKED. THE HON'BLE PUNE TRIBUNAL ALSO OBSERVED TH AT THE STAMP DUTY PAID BY THE PURCHASER ON SRO VALUE IS OF NO RELEVANCE. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT (A) ERRED IN BOTH IN LAW AND ON FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DIRECTING THE A.O. T O ADOPT THE ACTUAL SALE CONSIDERATION RECEIVED OF RS. 12.00 CRS . AS AGAINST THE FULL VALUE OF THE CONSIDERATION AS PER STAMP DU TY OF RS. 21,88,97,000/- AS PER SECTION 5OC. 3. THE LEARNED CLT(A) FAILED TO APPLY THE PROVISION S OF SEC. 5OC TO THE FACTS OF THE CASE IN PROPER PERSPECTIVE. 4. ANY OTHER GROUND(S) THAT MAY BE URGED AT THE TIM E OF HEARING. 5. THE DR RELIED ON THE ORDER OF AO WHILE THE LD. A R OF THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A) AS WELL AS PLACED RELIANCE ON FEW CASES, IN PARTICULAR, THE DECISION OF THE IT AT PUNE BENCH IN THE CASE OF KRISHI UTPANNA BAZAR SAMITTEE, ITA NO. 2043/PN/2012, DATED 20/03/2014, A COPY OF WHICH IS PLACED ON RECO RD. 6. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. IT IS A KNOWN FACT THAT ASSESSEE IS THE DECLARED SICK COMPANY BY BIFR ON 18/05/1997 AND IDBI IS APPOINTED AS OPERATING AGENCY U/S 17(3) OF THE ACT OF THE SIC SPECIAL PROV ISIONS OF THE ACT, 5 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. 1985. IN ORDER TO EXAMINE VIABILITY OF THE COMPANY AND FORMULATING REVIVAL PACKAGE FOR THE COMPANY. SINCE THE ASSESSEE HAS BECOME SICK, OPERATION OF THE ASSESSEE COMPANY WAS TAKEN O VER BY OPERATING AGENCY I.E. IDBI IN ORDER TO REHABILITATE THE COMPA NY. ACCORDINGLY, IDBI HAS CONSTITUTED ASSET SALE COMMITTEE (ASC) TO IDENTIFY SURPLUS ASSETS IN THE COMPANY. ACCORDINGLY, IT HAS IDENTIFI ED FACTORY LAND OF 6.64 ACRES BELONGING TO THE COMPANY LOCATED AT INDU STRIAL ESTATE, MOULA ALI, SECUNDERABAD. IN ORDER TO FIX THE RESERV E PRICE, IDBI OBTAINED VALUATION REPORT FROM THE REGISTERED VALUE R I.E. MR. V. JAGANNATH RAO AND ASSOCIATES ON 07/12/2009, AS PER WHICH, THE REGISTERED VALUE WAS AT RS. 8.02 CRORES. ASC INVITE D TENDERS BY ADVERTISING IN THE LEADING NEWS PAPERS. THE COMMITT EE HAS RECEIVED HIGHEST BIDDER FROM APIIC I.E. PUBLIC UNDERTAKING O F GOVT. OF AP FOR AN AMOUNT OF RS. 12 CORES. THE SAME WAS FINALIZED AND THE FACTORY LAND WAS SOLD TO APIIC VIDE SALE DEED DATED 17/05/2011. AO HAS INVOKED SECTION 50C ON THE ABOVE TRANSACTION BY MERELY RELY ING ON THE SRO VALUE FOR THE PURPOSE OF STAMP DUTY. IN OUR CONSIDE RED VIEW, AO CANNOT ADOPT SRO VALUE U/S 50C FOR THE FOLLOWING RE ASONS: A) SALE WAS MADE BY ASC COMMITTEE WHEREIN THE ASSES SEE IS ONE OF THE MEMBER AS JOINT SECRETARY. B) ASSESSEE WAS NEVER A DECISION MAKER IN THE ABOVE PROCESS OF SALE AND ALWAYS REMAIN AS A SICK INDUSTRIAL UNDE RTAKING UNDER DISTRESS FOR REVIVAL. C) THE PURCHASER IS ANOTHER PUBLIC SECTOR UNDERTAKI NG OF GOVT. OF AP. D) THE OPERATING AGENCY I.E. IDBI HAS OBTAINED VALU ATION REPORT FROM THE REGISTERED VALUER DETERMINING THE VALUE OF THE PROPERTY AT RS. 8.02 CRORES, WHICH IS FAR BELOW BOTH THE SRO VALUE AS WELL AS THE VALUE AT WHICH IT WAS SOLD. E) MOREOVER, THE AO HAS NOT BROUGHT ON RECORD ANY F INDING THAT THE ASSESSEE HAS RECEIVED ANY OTHER BENEFIT DIRECTL Y OR INDIRECTLY. BY CONSIDERING THE ABOVE FACTS, IN OUR CONSIDERED V IEW, THE SALE WAS DISTRESS SALE. IN THIS CONNECTION, WE REFER TO THE RATIOS LAID DOWN IN 6 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. THE FOLLOWING CASES, ON WHICH, INTER-ALIA, RELIANCE IS PLACED BY THE ASSESSEE: I) IN THE CASE OF CIT VS. SHR. CHANDRA NARAIN CHAUD HRI VIDE ITA NO. 287 OF 2011, DATED 29/08/2013, THE ALLAHABA D HIGH COURT HAS HELD AS UNDER: SECTION 50-C OF THE ACT IS A RULE OF EVIDENCE IN A SSESSING THE VALUATION OF PROPERTY FOR CALCULATING THE CAPITAL G AIN. THE DEEMING PROVISION UNDER SECTION 50C(1) OF THE ACT I S REBUTTABLE. IT IS WELL KNOWN THAT AN IMMOVABLE PROP ERTY MAY HAVE VARIOUS ATTRIBUTES, CHARGES, ENCUMBRANCES, LIM ITATIONS AND CONDITIONS. IN THE PRESENT CASE, IT IS STATED THAT THE PROPERTY WAS UNDER THE TENANCY OF FATHER OF THE PURCHASER SI NCE 1969 AND THUS THE ASSESSEE BEING LAND LORD OF THE PROPER TY, OFFERED IT FOR SALE TO THE TENANT, WHICH COULD NOT HAVE ATTRAC TED FAIR MARKET VALUE, AS A WILLING PURCHASER MAY HAVE OFFERED FOR A PROPERTY IN VACANT CONDITION. THE STAMP VALUATION AUTHORITY DOE S NOT TAKE INTO CONSIDERATION THE ATTRIBUTES OF THE PROPERTY F OR DETERMINING THE FAIR MARKET VALUE IN THE CONDITION THE PROPERTY IS A OFFERED FOR SALE AND IS PURCHASED. HE IS REQUIRED TO VALUE THE PROPERTY IN ACCORDANCE WITH THE CIRCLE RATES FIXED BY THE CO LLECTOR. THE OBJECT OF THE VALUATION BY THE STAMP VALUATION AUTH ORITY IS TO SECURE REVENUE ON SUCH SALE AND NOT TO DETERMINE TH E TRUE, CORRECT AND FAIR MARKET VALUE ON WHICH IT MAY BE PU RCHASED BY A WILLING PURCHASER SUBJECT TO AND TAKING INTO CONS IDERATION ITS SITUATION, CONDITION AND OF HER ATTRIBUTES SUCH AS IT OCCUPATION BY TENANT, ANY CHARGE OR LEGAL ENCUMBRANCES. II) IN THE CASE OF KRISHI UTPANNA BAZAR SAMITTEE VS . DCIT, IN ITA NO. 2043/PN/2012 AND OTHERS VIDE ORDER DATED 20/03/2014, ON SIMILAR ISSUE AS IN THE CASE UNDER CONSIDERATION, OBSERVED AS UNDER: 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. SECTION 50C OF THE ACT IS A SPECIAL PROVISION WHICH PROVIDES A DEEMING FICTION. IN TERMS OF SECTION 50C OF THE ACT IN CASES WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS RESULT OF THE TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH, IS LOWER THAN THE VALUE A DOPTED OR ASSESSED BY ANY AUTHORITY OF STATE OF GOVERNMENT FOR THE PUR POSES OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THEN THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER F OR THE PURPOSES OF COMPUTING CAPITAL GAIN IN TERMS OF SECTION 48 OF TH E ACT. IN THE PRESENT CASE, THE REVENUE HAS SOUGHT TO JUSTIFY INV OKING OF SECTION 50C OF THE ACT PRIMARILY ON THE GROUND THAT THE VAL UE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSES OF PAYME NT OF STAMP DUTY IN RESPECT OF TRANSFER OF THE TWO PROPERTIES IN QUE STION IS HIGHER THAN THE ACTUAL CONSIDERATION ACCRUING TO THE ASSESSEE A S A RESULT OF THEIR 7 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. SALE. THE DEFENCE OF THE ASSESSEE IS THAT THE SALE CONSIDERATION STATED IN THE SALE-DEED IS LIABLE TO BE TAKEN AS TH E FAIR MARKET VALUE EVEN FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN T HE PRESENT CASE BECAUSE THE SALE/TRANSFER IN THE PRESENT CASE IS BY WAY OF A PUBLIC AUCTION CONDUCTED BY A STATUTORY BODY. PERTINENTLY, THE ASSESSEE IS A STATUTORY BODY INCORPORATED UNDER THE PROVISIONS OF THE MAHARASHTRA AGRICULTURAL PRODUCE MARKETING (REGULATION) ACT, 19 63 AND IS INTER- ALIA, ENGAGED IN THE ACTIVITY OF MARKETING OF AGRIC ULTURAL PRODUCE AS A PUBLIC UTILITY. THE MOOT QUESTION IS AS TO WHETHER THE AFORESAID PROPOSITION OF THE ASSESSEE IS IN ACCORDANCE WITH L AW OR NOT. 9. AS NOTED EARLIER, THE OBJECTIVE OF SECTION 50C O F THE ACT IS TO SUBSTITUTE THE VALUE ADOPTED BY A STAMP VALUATION A UTHORITY AS THE FULL VALUE OF CONSIDERATION IN CASES WHERE THE ACTU AL CONSIDERATION RECEIVED OR ACCRUING TO AN ASSESSEE IS LOWER THAN T HE VALUE ASSESSED BY STAMP VALUATION AUTHORITY. IN OTHER WORDS, IN SU CH SITUATIONS, THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY I S TO BE TAKEN AS THE FULL VALUE OF CONSIDERATION IN ORDER TO COMPUTE THE CAPITAL GAINS. IN THIS CONTEXT, ASSESSEE HAS REFERRED TO THE PROVISIO NS OF RULE 4(6) OF THE BOMBAY STAMP (DETERMINATION OF TRUE MARKET VALU E OF PROPERTY) RULES, 1995, ESPECIALLY THE PROVISO WHICH WE HAVE R EPRODUCED IN THE EARLIER PART OF THIS ORDER. IN TERMS OF THE SAID PR OVISO, THE GOVERNMENT OF MAHARASHTRA HAS ISSUED A CIRCULAR DAT ED 30.06.2005 (SUPRA) DEALING WITH THE CASES WHERE SALE IS CONDUC TED BY DEBT RECOVERY TRIBUNAL AND OTHER GOVERNMENT OR NON-GOVER NMENT ORGANIZATIONS BY PUBLIC AUCTION. CONSIDERING THE PR OVISIONS OF RULE 4(6) OF THE BOMBAY STAMP (DETERMINATION OF TRUE MAR KET VALUE OF PROPERTY) RULES, 1995, THE SAID CIRCULAR PRESCRIBES THAT IN AFORESAID CASES THE HIGHEST PRICE AS CERTIFIED SHALL BE CONSI DERED AS THE FAIR MARKET VALUE FOR THE PURPOSES OF PAYMENT OF STAMP D UTY. THE RELEVANT PORTION OF THE CIRCULAR, A COPY OF WHICH H AS BEEN PLACED ON RECORD, READS AS UNDER :- 1. WHILE REGISTERING THE DOCUMENTS IN RESPECT OF S ALE CONDUCTED BY DEBT RECOVERY TRIBUNAL AND OTHER GOVT./ NON GOVT. O RGANIZATIONS OR THEIR COMPETENT AUTHORITIES BY PUBLIC AUCTION ON AS IS WH ERE IS BASIS AND ALONG WITH THE ENCUMBRANCES AND AS PER TERMS AND CO NDITIONS OF THE AUCTION SALE, THE HIGHEST PRICE AS CERTIFIED IN THE SALE CERTIFICATE OR OTHER ORDER ISSUED BY SUCH AUTHORITY SHOULD BE CONSIDERED AS FAIR MARKET VALUE FOR THE PURPOSES OF STAMP DUTY AND IN SUCH CA SES THE PRICE AS PER READY RECKNOER SHOULD NOT BE CONSIDERED. 2. THE REGISTERING AUTHORITY SHOULD ASSESS THE STAM P DUTY ON THE VALUE MENTIONED IN THE SALE CERTIFICATE AND THE SAID SALE CERTIFICATE AND EXTRACT OF PROPERTY CARD SHOULD BE MADE ANNEXURE OF THE DOCUMENT TO BE REGISTERED. 3. THE MARKET VALUE AS DEFINED IN SECTION 2 [NA] OF THE BOMBAY STAMP ACT, 1958 IN RESPECT OF SUCH PROPERTY SHOULD BE RES TRICTED TO THE VALUE DECLARED IN SALE CERTIFICATE ONLY FOR REGISTRATION OF SUCH DOCUMENT. THEREFORE IF SUCH PROPERTY IS / SUBSEQUENTLY SOLD, THE VALUE AS PER READY RECKNOER SHOULD BE TAKEN FOR THAT TRANSACTION. 10. IN THE PRESENT CASE, ASSESSEE BEFORE US IS A ST ATUTORY BODY AND THE 8 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. SALE OF PROPERTIES IN QUESTION HAS BEEN MADE THROUG H THE ROUTE OF PUBLIC AUCTION, WHICH IS NOT IN DISPUTE. THE CIT(A) HAS AL SO REPRODUCED THE SUBMISSIONS OF THE ASSESSEE BEFORE HIM WHICH INTER- ALIA CONTAIN AVERMENTS THAT THE SALE OF THE PROPERTIES WAS CONDU CTED IN PUBLIC AUCTION, AFTER SEEKING NECESSARY PERMISSIONS FROM T HE DIRECTOR OF PANAN OF MAHARASHTRA STATE. FACTUALLY SPEAKING, IN OUR CO NSIDERED OPINION, THE IMPUGNED TRANSFERS EFFECTED BY THE ASSESSEE BY WAY OF PUBLIC AUCTION FALL WITHIN THE PURVIEW OF THE CIRCULAR ISSUED BY G OVERNMENT OF MAHARASHTRA DATED 30.06.2005 (SUPRA) FOR THE PURPOS ES OF PAYMENT OF STAMP DUTY. IN TERMS OF THE SAID CIRCULAR, THE HIGH EST PRICE IN THE SALE AUCTION IS CONSIDERED TO BE THE FAIR MARKET VALUE F OR THE PURPOSES OF PAYMENT OF STAMP DUTY. THIS WOULD MEAN THAT THE CON SIDERATION STATED IN THE SALE-DEED IS TO BE ACCEPTED AS THE FAIR MARKET VALUE FOR THE PURPOSES OF PAYMENT OF STAMP DUTY IN THE PRESENT CASE AND NO T THE PRICES WORKED OUT AS PER THE READY RECKNOER. OSTENSIBLY, IN SUCH A SITUATION THE INVOKING SECTION 50C OF THE ACT FOR THE PURPOSES OF SUBSTITUTING THE FULL VALUE OF CONSIDERATION IN ORDER TO COMPUTE THE CAPI TAL GAIN WOULD FAIL SINCE THERE WOULD NOT BE ANY DIFFERENTIAL BETWEEN T HE STATED CONSIDERATION AND THE VALUE TO BE CONSIDERED BY THE STAMP VALUATION AUTHORITY OF THE STATE GOVERNMENT FOR THE PAYMENT O F STAMP DUTY. HOWEVER, IT HAS BEEN POINTED OUT BY THE REVENUE THA T THE BUYERS OF THE PROPERTIES HAVE PAID STAMP DUTY AT THE VALUE DETERM INED ON THE BASIS OF RATES PRESCRIBED IN THE READY RECKENOR, WHICH ARE H IGHER THAN STATED CONSIDERATION. IN OUR CONSIDERED OPINION, THE AFORE SAID FACTUM WOULD NOT MAKE ANY DIFFERENCE TO THE RATIONALE OF INVOKING SE CTION 50C OF THE ACT, WHICH HAS TO BE DECIDED ON THE BASIS OF THE PREVAIL ING LEGAL POSITION, AND NOT ON THE BASIS OF THE POSITION TAKEN BY A PARTY. PERTINENTLY, THE PURCHASER OF THE PROPERTIES ARE LIABLE TO BEAR EXPE NSES OF STAMP DUTY AND IT WAS NOT WITHIN THE DOMAIN OF THE ASSESSEE AN D THEREFORE ASSESSEE CANNOT BE PUT TO A JEOPARDY OF INVOKING OF SECTION 50C OF THE ACT MERELY BECAUSE OF THE FAULT OF THE BUYERS OF THE PROPERTIE S. 11. IN VIEW OF THE AFORESAID DISCUSSION AND HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, IN OUR VIEW, THE CIT(A) ERRED IN AFFIRMING THE INVOKING OF SECTION 50C OF THE ACT IN RELATION TO THE TWO PROPERTIES SOLD BY THE ASSESSEE THROUGH PUBLIC AUCT ION. ACCORDINGLY, WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AS SESSING OFFICER TO ALLOW APPROPRIATE RELIEF TO THE ASSESSEE AS PER LAW . AS THE ISSUE UNDER CONSIDERATION IS MATERIALLLY IDE NTICAL TO THAT OF CASE DECIDED BY THE PUNE BENCH AS ABOVE, RESPECTFUL LY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF THE CIT(A), WHO INTURN , FOLLOWED THE SAID CASE AND HELD THAT THE AO CANNOT ADOPT THE SAL E CONSIDERATION AT RS. 21,88,97,000/- AND INVOKE SECTION 50C. ACCORDIN GLY, WE DEEM IT FIT TO DISMISS THE GROUNDS RAISED BY THE REVENUE. 9 ITA NO. 1220/H/16 SOUTHERN STEEL LTD. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 10 TH NOVEMBER, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RA HMAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 10 TH NOVEMBER, 2017. KV COPY TO:- 1) ITO, WARD 3(3), 7 TH FLOOR, ROOM NO. 708, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 2) M/S SOUTHERN STEEL LTD., INDUSTRIAL DEVELOPMENT AREA, MOULA-ALI, HYDERABAD. 3) CIT(A) 3, HYDERABAD 4 PR. CIT 3, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./ P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER