M/s. Burnie Braes Tea Company, Kolkata V. ITO, Ward - 34(1), Kolkata, Kolkata

ITA 1866/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54612 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 04-10-2010
• Court: TRIBUNAL
• Department Lawyers: M BHATTACHARYA
• Assessee Lawyers: R K PATODI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income
• Section: 143(3); 50C; 143(1); 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . ! . '# ) [BEFORE SRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM] $ $ $ $ / I.T.A NOS. 1866 & 1867/KOL/2010 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEARS: 2005-06 & 2006-07 BURNIE BRAES TEA COMPANY VS. INCOME-TAX OFFICER, WD-34(1), KOLKATA (PAN:AADFB 3899 H) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) DATE OF HEARING: 25.10.2011 DATE OF PRONOUNCEMENT: 31.10.2011 FOR THE APPELLANT: SHRI R. K. PATODI FOR THE RESPONDENT: SHRI M. BHATTACHARYA '. / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THESE APPEALS BY ASSESSEE ARE ARISING OUT OF SEPARA TE ORDER OF CIT(A)-XX, KOLKATA IN APPEAL NOS.98 & 203/CIT(A)-XX/WD-34(1)/08-09/KOL DA TED 30.07.2010. ASSESSMENTS FOR ASSESSMENT YEARS 2005-06 AND 2006-07 WERE FRAMED B Y ITO, WD-34(1), KOLKATA U/S. 154 AND 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS SEPARATE ORDERS DATED 20.10.08 AND 19.12.08 RESPECTIVELY 2. FIRST, WE WILL TAKE UP ITA NO. 1866/KOL/2010. T HE FIRST LEGAL ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING JURISDICTION ASSUMED BY ASSESSING OFFICER BY INVOKING PROVISIONS OF SECTION 154 OF THE ACT FO R CHANGING HEAD OF INCOME I.E. ASSESSEE CLAIMED THE INCOME UNDER THE HEAD PROFIT AND GAINS OF BUSINESS WHEREAS ASSESSING OFFICER CHANGED THE SAME AS INCOME FROM OTHER SOURCES. F OR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.1: (I) FOR THAT THE ID. CIT (A) SHOULD HAVE HELD THE IMPUGNED ORDER DATED 20.10.08 TO BE UNLAWFUL, AS THE AMENDMENT MADE BY THE ASSESSING OF FICER TO THE INTIMATION DATED 13.11.06 ISSUED BY HIM U/S 143(1), WAS BEYOND THE S COPE OF SECTION 143(1) ITSELF AND, BEING SO, THE ASSESSING OFFICER WAS NOT ENTITLED TO DO SUCH AMENDMENT BY WAY OF RECTIFICATION U/S 154 OF THE INCOME TAX ACT, 1961. (II) FOR THAT THE LD. C.L.T.(A) SHOULD HAVE HELD TH AT THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE INCOME TAX ACT WAS BAD IN LAW IN AS MUCH AS HE RESORTED TO THE PROVISIONS OF SECTION 154 FOR TAXING INTERES T INCOME OF THE APPELLANT FROM MONEY 2 ITA 1866-1867/K/2010 BURNIE BRAES TEA CO. A.Y.05-06&06-07 LENDING BUSINESS ACTIVITIES AS AN INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF UNDER THE HEAD PROFITS & GAINS OF BUSIN ESS AS RETURNED BY \THE APPELLANT, AS HE HAD NO JURISDICTION, WHATSOEVER, UNDER THAT SECT ION TO ALTER THE HEAD OF ASSESSMENT OF SUCH INTEREST INCOME IN THE GUISE OF RECTIFICATION, THAT TOO, WHEN THE MISTAKE ALLEGED BY HIM WAS NOT APPARENT BUT WAS A RESULT OF HIS LONG D RAWN PROCESS OF REASONING GIVEN IN THE IMPUGNED ORDER RUNNING INTO SEVERAL PAGES. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF GROWING AND MANUFACTURING OF TEA. IT FURNISHED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2005-06 ON 31.07.2005 AND THE SAID RETURN WAS PROCESSED U/S. 143(1) OF THE ACT ON 13.11.2006 ON RETURNED INCOME. THEREAFTER, THE ASS ESSING OFFICER ISSUED NOTICE U/S. 154 OF THE ACT FOR MODIFICATION OF PROCESSING MADE BY ASSESSIN G OFFICER U/S. 143(1). ASSESSING OFFICER NOTED IN HIS ORDER U/S. 154 OF THE ACT THAT INTERES T INCOME EARNED BY ASSESSEE DECLARED AS BUSINESS INCOME. FOR THIS, HE GAVE FOLLOWING FINDIN G: IN THE INSTANT CASE, THE BUSINESS OF THE ASSESSEE FIRM WAS GROWING AND MANUFACTURING TEA AND SALE THEREOF DURING THE RELEVANT FINANCIAL YEAR. IT IS APPARENT FROM THE RECORD THAT THE LOAN WAS TAKEN FOR THE EXIGENCY OF THE BUS INESS, NOT FOR LENDING MONEY TO EARN INTEREST. THE FIRM HAS NO SUCH AUTHORITY OR LICENCE GIVEN BY THE RBI FOR MONEY LENDING BUSINESS JUST LIKE NON BANKING ORGANIZATION. SO, T HE FIRM CANNOT MAKE SUCH BUSINESS LEGALLY. AS PER RECORD, THE ASSESSEE FIRM RECEIVED LOAN AT DIFFERENT DATES AT THE URGENCY OF THE BUSINESS AND WHEN THE FIRM ACCUMULATED SUFFICIE NT FUND, THE LOAN WAS TENDERED TO EARN EXTRA. THIS PROVES THAT THE INTEREST EXPENDIT URE ON LOAN TAKEN WAS FOR THE PURPOSE OF THE BUSINESS, NOT EXPENDED WHOLLY AND EXCLUSIVELY FOIR THE PURPOSE OF MAKING OR EARNING SUCH INCOME. HENCE, INTEREST EXPENDITURE WAS RIGHT LY CONSIDERED FOR BUSINESS PURPOSE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF ASSESSING OFFICER EXACTLY ON SIMILAR REASONING. WE , IN VIEW OF THE ABOVE FACTS, ARE OF THE VIEW THAT THE AO WHERE REDETERMINATION OF THE TAXABLE I NCOME IN A DIFFERENT MANNER BY APPLYING A PARTICULAR PROVISION OF LAW IS NOT PERMITTED IN FRA MING AN INTIMATION UNDER SECTION 143(1)(A) AND AS SECTION 154 GIVING POWER OF RECTIFICATION OF AN INTIMATION UNDER SECTION 143(1)(A) IS CO- TERMINUS WITH THE POWER TO MAKE PRIMA FACIE ADJUSTM ENTS UNDER SECTION 143(1)(A), IT WOULD FOLLOW THAT THE ASSESSING OFFICER CANNOT REVISE THE INTIMATION AND RE-DETERMINE THE INCOME IN PURPORTED EXERCISE OF POWER UNDER SECTION 154. WHAT COULD NOT HAVE BEEN DONE DIRECTLY CANNOT BE DONE INDIRECTLY IN THE GARB OF RECTIFICATION POW ER. CONVERSELY, WHERE BY RESORTING TO PRIMA FACIE ADJUSTMENTS OF CONTROVERSIAL NATURE IN PURPOR TED EXERCISE OF POWER UNDER SECTION 143(1)(A), IT CAN BE SAID THAT THE ASSESSING OFFICE R OVER-STEPPED HIS JURISDICTION THEREBY DETERMINING THE INCOME MUCH HIGHER THAN WHAT WAS RE TURNED BY THE ASSESSEE. THIS HAS OBVIOUSLY INTRODUCED AN ERROR WHICH IS APPARENT FRO M THE RECORD. WHEN SUCH AN ERROR IS POINTED OUT TO THE ASSESSING OFFICER, HE IS DUTY BOUND TO A MEND, UNDER SECTION 154(1)(B), THE INTIMATION 3 ITA 1866-1867/K/2010 BURNIE BRAES TEA CO. A.Y.05-06&06-07 UNDER SECTION 143(1)(A). THIS IS A CASE WHERE THE I LLEGALITY OR MISTAKE IN THE INTIMATION UNDER SECTION 143(1)(A) ARISES FOR THE REASON THAT THE SA ID PROVISION WHICH OUGHT NOT TO HAVE BEEN INVOKED HAS BEEN INVOKED AND THE INCOME WAS WRONGLY DETERMINED BY MAKING UNILATERAL ADJUSTMENTS WHICH DO NOT FALL WITHIN THE AMBIT OF T HE SAID SECTION. THUS, IN SUCH CIRCUMSTANCES, IF THE ASSESSING OFFICER PASSES AN ORDER REJECTING THE ASSESSEES APPLICATION UNDER SECTION 154, IT CAN BE SAID THAT THE ASSESSING OFFICER HAS FAILE D TO EXERCISE THE JURISDICTION WHICH HE OUGHT TO HAVE EXERCISED UNDER SECTION 154 OF THE ACT. BUT IN THE PRESENT CASE THE ASSESSEE HAS ASSUMED JURISDICTION U/S.154 OF THE ACT WHEREBY HE HAS CHAN GED THE HEAD OF INCOME, WHICH IS NOT PERMISSIBLE UNDER THIS PROVISION. ACCORDINGLY, WE ALLOW THIS ISSUE OF ASSESSEES APPEAL ON JURISDICTION. APPEAL OF THE ASSESSEE IS ALLOWED. 4. NOW, WE ARE COMING TO ITA NO.1867/K/2010. THE F IRST ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF ASSESSING OFFICER IN TREATING THE INTEREST INCOME EARNED BY ASSESSEE AS INCOME FR OM OTHER SOURCES INSTEAD OF INCOME DECLARED BY ASSESSEE AS BUSINESS INCOME. FOR THIS, THE ASSE SSEE HAS RAISED FOLLOWING TWO GROUNDS: 1. (I) FOR THAT THE ID.CIT (A) WAS NOT JUSTIFIED I N CONFIRMING THE ASSESSMENT OF INTEREST INCOME EARNED BY THE APPELLANT FROM MONEY-LENDING A CTIVITIES AS INCOME FROM OTHER SOURCES, WHEN SUCH ACTIVITIES WERE CARRIED ON BY TH E APPELLANT AS A PART OF ITS BUSINESS. (II) FOR THAT, ON THE PRINCIPLES OF CONSISTENCY, TH E CIT (A) SHOULD HAVE HELD THAT THE APPELLANT CARRIED ON THE MONEY-LENDING ACTIVITIES A S A PART OF ITS BUSINESS, WHEN SUCH ACTIVITIES HAVE REGULARLY BEEN CONSIDERED BY THE DE PARTMENT AS ITS BUSINESS IN THE EARLIER YEARS, EXCEPT IN THE ASSESSMENT YEAR 2005-06, WHICH IS ALSO UNDER SEPARATE APPEAL BEFORE THE HONOURABLE TRIBUNAL. 2. FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ASSESSMENT MADE BY THE ASSESSING OFFICER WHEREIN HE HAS NOT ALLOWED, DEDUCTION OF IN TEREST EXPENDITURE AMOUNTING TO RS. 307649 INCURRED BY THE APPELLANT FOR EARNING OF ITS INCOME FROM MONEY- LENDING ACTIVITIES, WHILE ASSESSING THE SAME UNDER THE HEAD INCOME FR OM OTHER SOURCES WHEN THIS EXPENDITURE HAVING BEEN INCURRED FOR MAKING OR EARN ING OF SUCH INCOME WAS DEDUCTIBLE UNDER THE PROVISIONS OF SECTION 57 (III) OF THE INC OME-TAX ACT. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN THE BUSINESS OF GROWING AND MANUFACTURING OF TEA. ASSESSING OFFICER WHILE FRAM ING ASSESSMENT ASSESSED THE GROSS AMOUNT OF INTEREST RECEIVED ON UNSECURED LOANS ADVANCED BY ASSESSEE AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF INCOME DECLA RED BY ASSESSEE UNDER THE HEAD BUSINESS INCOME. THE CIT(A) ALSO CONFIRMED THE ACTION OF A SSESSING OFFICER EXACTLY ON IDENTICAL REASONING EVEN THOUGH THE ORDER OF CIT(A) IS NON SP EAKING ORDER. ASSESSEE BEFORE US ARGUED FOLLOWING: 4 ITA 1866-1867/K/2010 BURNIE BRAES TEA CO. A.Y.05-06&06-07 A) THE ACTIVITIES OF ADVANCING LOANS WERE CARRIED ON BY THE APPELLANT AS A PART OF ITS BUSINESS ACTIVITIES. IT WAS NOT A CASE THAT THE AP PELLANT INVESTED ITS TEMPORARY SURPLUS FUND TO EARN EXTRA INCOME. THIS FACT EVIDENT FROM T HE AMOUNT OF LOANS GRANTED, NUMBER OF PARTIES INVOLVED, PERIOD FOR WHICH THE LOANS GRA NTED AND THE AMOUNT OF INTEREST EARNED FROM ADVANCING OF LOANS. B) THE ASSESSING OFFICER HAS STATED THAT THE APPEL LANT HAD NO MONEY LENDING LICENSE FROM RBI, LIKE NON-BANKING ORGANIZATION, WHEREAS, NO SU CH LICENSE WAS ACTUALLY REQUIRED BY THE APPELLANT FOR ITS MONEY LENDING BUSINESS ACTIVI TIES. C) THE ASSESSING OFFICER HAS STATED THAT NO SEPARAT E BOOKS WERE MAINTAINED BY THE APPELLANT FOR THE PURPOSES OF MONEY LENDING, WHEREA S, NO SUCH SEPARATE BOOKS OF ACCOUNTS WERE ACTUALLY REQUIRED UNDER ANY LAW. D) THE APPELLANT BEING A PARTNERSHIP FIRM, HAD A CO ST FOR ITS FUNDS, BE IT PARTNERS CAPITAL OR THE BORROWED CAPITAL. AS SUCH, THERE WAS A DIREC T NEXUS BETWEEN THE INTEREST EARNED AND INTEREST INCURRED FOR EARNING SUCH INCOME. BUT THE ASSESSING OFFICER FAILED TO CONSIDER THIS FACT AND WRONGLY ASSESSED THE AMOUNT OF INTEREST EARNED AS INCOME FROM OTHER SOURCES WHILE TREATING THE EXPENSES INCURRED FOR MAKING OR EARNING OF SUCH INCOME AS EXPENSES OF THE BUSINESS OF GROWING AND MANUFACT URING OF TEA. E) UNDER THE PROVISIONS OF THE INCOME-TAX ACT, IT I S NOT THE GROSS AMOUNT OF INCOME BUT IT IS THE COMPUTED AMOUNT OF INCOME WHICH IS ASSESSED TO TAX. THE ASSESSING OFFICER, THEREFORE, SHOULD HAVE ALLOWED DEDUCTION ON ACCOUN T OF INTEREST EXPENDITURE AMOUNTING TO OF RS. 307649/- ACTUALLY INCURRED BY THE APPELLA NT FOR MAKING OR EARNING ITS INCOME FROM THE ACTIVITY OF LENDING MONEY FROM THE GROSS A MOUNT OF INTEREST EARNED, TO WHICH THE APPELLANT WAS ENTITLED UNDER THE PROVISIONS OF SECTION 57(III) OF THE ACT EVEN IF SUCH INCOME WAS ASSESSED UNDER THE HEAD INCOME FROM OTH ER SOURCES AS WRONGLY DONE BY THE ASSESSING OFFICER. IT IS A FACT THAT THE ASSESSEE HAS EXTRA FUNDS AVAI LABLE WITH IT AND OUT OF WHICH ADVANCED LOANS AS UNSECURED LOANS TO VARIOUS PARTIES AND FROM WHICH I T HAS EARNED INCOME. ASSESSEES CONTENTION IS THAT THIS TEMPORARY SURPLUS FUND INVESTED, EARNE D INCOME IS IN THE NATURE OF BUSINESS BUT THE ASSESSEE DESPITE OPPORTUNITY GIVEN TO IT COULD NOT PROVE, OR ON QUERY FROM THE BENCH IT COULD NOT EXPLAIN HOW THIS SURPLUS FUNDS ADVANCED AND WHA T WAS THE AGREEMENT WITH THE PERSONS WHOM THE ADVANCES WERE GIVEN, WHETHER THESE WERE TE MPORARY ADVANCE OR NOT THE ASSESSEE COULD NOT PROVE. ASSESSEES ANOTHER CONTENTION IS THAT IT HAS CONSISTENTLY BEEN DECLARING THIS INCOME AS BUSINESS INCOME BEING ASSESSEE CARRYING O N MONEY LENDING ACTIVITY AS PART OF ITS BUSINESS AND ACCORDING TO HIM WHEN SUCH ACTIVITIES HAVE REGULARLY BEEN CONSIDERED BY REVENUE AS IT BUSINESS IN EARLIER YEARS EXCEPT IN ASSESSMEN T YEAR 2005-06, IN THIS YEAR A DIFFERENT VIEW CANNOT BE TAKEN. WHEN A QUERY WAS PUT, WHETHER HE CAN FILE THE ASSESSMENT ORDERS IN EARLIER YEAR, HE DISCLOSED BEFORE US THAT HE HAS FILED COPI ES OF ASSESSMENT ORDER FOR ASSESSMENT YEAR 1990-91, 1994-95 AND 2001-02 BUT COULD NOT SHOW US THE INCOME DECLARED AS INTEREST INCOME TAKEN AS BUSINESS INCOME FROM THE ACCOUNTS AND CONS IDERED BY REVENUE. IN VIEW OF THESE FACTS, WE CANNOT ACCEPT THE PLEA OF ASSESSEE THAT THIS INT EREST INCOME IS BUSINESS INCOME S DECLARED BY ASSESSEE, BUT THIS IS INTEREST INCOME AND LOWER AUT HORITIES HAVE RIGHTLY TREATED THE SAME AS 5 ITA 1866-1867/K/2010 BURNIE BRAES TEA CO. A.Y.05-06&06-07 INCOME FROM OTHER SOURCES WHILE ASSESSING THE INCOM E OF ASSESSEE. HOWEVER, THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S. 57 OF THE ACT. THE ASS ESSING OFFICER WILL ALLOW THE CLAIM OF ASSESSEE OF INTEREST EXPENDITURE INCURRED BY ASSESSEE QUA TH E INCOME OF INTEREST EARNED AND DECLARED AS INCOME FROM OTHER SOURCES. THIS ISSUE OF ASSESSEES APPEAL IS PARTLY ALLOWED AS INDICATED ABOVE. 6. THE NEXT ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN REPLACING THE AM OUNT OF SALE CONSIDERATION AT RS.11,42,400/- AS AGAINST THE SALE CONSIDERATION OF RS. 3 LACS. F OR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.3 FOR THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE COMPUTATION OF CAPITAL GAIN S MADE BY THE ASSESSING OFFICER ON SALE OF AN OFFICE SPACE BY THE APPELLANT BY REPLACI NG ACTUAL AMOUNT OF SALE CONSIDERATION OF RS.3,00,000/- WITH THE AMOUNT OF VALUATION OF RS .11,42,400/- OBTAINED BY HIM FROM THE ADDITIONAL REGISTRAR OF ASSURANCE II, KOLKATA, BY WRONGLY APPLYING THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961, WHEN, THES E PROVISIONS DID NOT APPLY TO THE APPELLANT AS THE RELEVANT AGREEMENT WAS NOT THE SUB JECT MATTER OF REGISTRATION. 7. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS ARE THAT THE ASSESSEE SOLD OFFICE SPACE HAVING SUPER BUILT UP AREA OF ABOUT 204 SFT. AT NO. 1, R. N. MUKHERJEE ROAD ON 17.03.2006 THROUGH A GREEMENT FOR SALE OF A CONSIDERATION OF RS.3 LACS. ASSESSEE ACQUIRED THIS SPACE FOR A SUM OF RS.2 LACS ON 26.12.1999 BY WAY OF AGREEMENT FOR SALE AND ACCORDINGLY, HE DECLARED LON G TERM CAPITAL GAIN ON THE SAME. ASSESSING OFFICER BY INVOKING PROVISIONS OF SECTION 50C OF TH E ACT REFERRED THE MATTER TO ADDITIONAL REGISTRAR OF STAMP DUTY VALUATION, KOLKATA, WHO DET ERMINED THE VALUE OF THIS PROPERTY FOR ASCERTAINING THE STAMP DUTY AT RS.11,42,450/- AND A SSESSING OFFICER DETERMINED CAPITAL GAINS ON ITS VALUE BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. WE FIND THAT THE ASSESSEE HAS NOT REGISTERED THE SALE DEED OR REGISTERED THE SALE DOCUMENT. THE SALE AGREEMENT WAS NEVER SUBJECT MATTER OF JURISDICTION OF STAMP DUTY AUTHOR ITIES HENCE, SECTION 50C OF THE ACT CANNOT BE APPLIED. WE FURTHER FIND THAT PROVISION OF SECTION 50C WAS AMENDED BY THE FINANCE NO. 2 ACT, 2009 W.E.F. 01/1-/2009. THE RELEVANT EXPLANATORY C IRCULAR OF FINANCE NO.2 ACT, 2009 STATES AS UNDER: 23.1 THE EXISTING PROVISIONS OF SECTION 50C PROVID E THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY AN AUTHORITY OF A STATE GOVERNMENT (STAMP VALUATION AUTHORITY) FOR THE PURP OSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER , THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RE SULT OF SUCH TRANSFER FOR COMPUTING CAPITAL GAIN. HOWEVER, THE PRESENT SCOPE OF THE PRO VISIONS DOES NOT INCLUDE TRANSACTIONS WHICH ARE NOT REGISTERED WITH STAMP DUTY VALUATION AUTHORITY, AND EXECUTED THROUGH AGREEMENT TO SELL OR POWER OF ATTORNEY. 6 ITA 1866-1867/K/2010 BURNIE BRAES TEA CO. A.Y.05-06&06-07 23.2 WITH A VIEW TO PREVENTING THE LEAKAGE OF REVEN UE, SECTION 50C IS AMENDED, SO AS TO PROVIDE THAT WHERE THE CONSIDERATION RECEIVED OR AC CRUING AS A RESULT OF TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH IS LE SS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY AN AUTHORITY OF STATE GOVERNMENT F OR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOP TED OR ASSESSED OR ASSESSABLE SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIV ED OR ACCRUING AS A RESULT OF SUCH TRANSFER FOR COMPUTING CAPITAL GAIN. 23.3 FURTHER, EXPLANATION 2 HAS BEEN INSERTED IN TH E SUBSECTION (2) OF THE SECTION 50C, SO AS TO CLARIFY THE MEANING OF THE TERM ASSESSABL E. 23.4 APPLICABILITY THESE AMENDMENTS HAVE BEEN MAD E APPLICABLE WITH EFFECT FROM 1 ST OCTOBER, 2009 AND WILL ACCORDINGLY APPLY IN RELATI ON TO TRANSACTIONS UNDERTAKEN ON OR AFTER SUCH DATE. IN VIEW OF THE ABOVE CIRCULAR, WE ARE OF THE VIEW T HAT WITH THE INSERTION OF EXPLANATION 2 IN SUB-SECTION 2 OF SECTION 50C WAS INTRODUCED W.E.F. 1-10-2009 SO AS TO CLARIFY THE MEANING TERM ASSESSABLE AND IT WAS PROVIDED THAT MERE CONSIDER ATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY AN AUTHORITY OF STATE GO VERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOP TED OR ASSESSED OR ASSESSABLE SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER FOR COMPUTATION OF CAPITAL GAINS. ACCORDINGLY, THIS IS SUE OF THE ASSESSEES APPEAL IS ALLOWED AS THE PROVISION OF SECTION 50C WILL NOT APPLY IN THE RELE VANT ASSESSMENT YEAR 2006-07. APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. 8. IN THE RESULT, APPEAL IN ITA NO.1866 OF 2010 IS ALLOWED AND IN ITA NO.1867 OF 2010 IS PARTLY ALLOWED. 9. ORDER PRONOUNCED IN OPEN COURT ON 31.10.2011. SD/- SD/- . ! . , '# , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( !# !# !# !#) )) ) DATED 31ST OCTOBER, 2011 /0 %12 3 JD.(SR.P.S.) '. 4 ,5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT BURNIE BRAES TEA COMPANY, 12, INDIA EXC HANGE PLACE, JUTE HOUSE, 1 ST FLOOR, KOLKATA-700 001. 2 ,-*+ / RESPONDENT- ITO, WARD-34(1), KOLKATA. 7 ITA 1866-1867/K/2010 BURNIE BRAES TEA CO. A.Y.05-06&06-07 3 . .% ( )/ THE CIT(A), KOLKATA 4. .% / CIT, KOLKATA 5 . >? ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, '.%@/ BY ORDER, 2 /ASSTT. REGISTRAR .