Urvasi Enterprises, Mangalavarapupeta V. Income Tax Officer, Ward-1, Rajahmundry

ITA 234/VIZ/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2237 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 30-04-2019
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER ./ I .T.A.NO. 234/VIZ/2019 ( / ASSESSMENT YEAR : 2011 - 12) S .A.NO. 49 /VIZ/201 9 (ARISING OUT OF I.T.A.NO.234/VIZ/2019) ( / ASSESSMENT YEAR : 20 11 - 12 ) M/S URVASI ENTERPRISES D.NO.34 - 1 - 2 MANGALAVARAPUPETA RAJAHMUNDRY EAST GODAVARI DIST. [PAN :AAB FU0291Q ] VS. INCOME TAX OFFICER WARD - 1 RAJAHMUNDRY ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI C.SUBRAHMANYAM , AR / RESPONDENT BY : S HRI D.K.SONOWAL , CIT DR / DATE OF HEARING : 0 4 . 0 6 . 201 9 / DATE OF PRONOUNCEMENT : 19 .06 . 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : THE ASSESSEE FILED STAY PETITION REQUESTING FOR STAY OF DEMAND OF RS.1,75,28,235/ - . DURING THE APPEAL HEARING, THE LD.AR DID NOT PRESS THE 2 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY STAY PETITION, SINCE THE MAIN APPEAL WAS ALSO TAKEN UP FOR HEARING SIMULTANEOUSLY. HENCE THE STAY APPLICATION FILED BY THE ASSESSEE IS DISMISSED. I.T.A. 234/VIZ/2019, A.Y.2011 - 12 2. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)], RAJAHMAHENDRAVARAM VIDE ITA NO.0 087/2014 - 15 DATED 15.03.2019 FOR THE A.Y.2011 - 12. 3. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE DEDUCTION U/S 50C OF THE INCOME TAX ACT (IN SHORT ACT). THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 30.09.2011 DECLARING TOTAL INCOME OF RS.9,84,14,290/ - . THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSM ENT WAS COMPLETED ON TOTAL INCOME OF RS.16,58,69,630/ - VIDE ORDER DATED 31.03.2014. DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAS SOLD THE OF VACANT SITE IN KAKINADA ADMEASURING 6,602 SQ.YDS IN DOOR NO.2 - 4 - 34 FOR A CONSIDERATION OF RS.10,56,32,000/ - VIDE SALE DEED DATED 28.02.2011 TO M/S CHANDANA BROTHERS SHOPPING MALL., VISAKHAPATNAM. PRIOR TO EXECUTION OF SALE DEED , THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH THE PURCHASER ON 16.11.2010 FOR SALE CONSIDERATION OF RS.10,56,32 000/ - WHICH WAS 3 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY REGISTERED BEFORE THE REGISTERING AUTHORITY AND THE ASSESSEE FILED THE RETURN OF INCOME ACCORDINGLY, ADMITTING LONG TERM CAPITAL GAINS OF RS.9,80,73,696/ - DECLARING FULL VALUE OF CONSIDERATION AT RS.10,56,32,000/ - . THE ASSESSING OFFICER (AO ) FOUND FROM THE SALE DEED DATED 28.02.2011 THAT THOUGH THE MARKET VALUE OF THE PROPERTY WAS RS.10,56,32,000/ - ACCEPTED BY THE SRO AS ON THE DATE OF REGISTRATION OF THE AGREEMENT, SUBSEQUENTLY IT WAS REVISED AND REFIXED AT RS.17,17,78,000/ - U/S 47(A) OF TH E INDIAN STAMPS ACT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY VIDE PROCEEDINGS NO.G2/MV/486/2011 DATED 04.03.2011 BY DISTRICT REGISTRAR OF ASSURANCES, KAKINADA(IN SHORT DISTRICT REGISTRAR) AS AGAINST THE ORIGINAL MARKET VALUE OF RS.10,56,32,000/ - ADOPTED B Y THE ASSESSEE AND THE ASSESSEE ALSO HAS PAID THE DIFFERENCE AMOUNT OF STAMP DUTY. THEREFORE, THE AO VIEWED THAT AS PER THE PROVISIONS OF SECTION 50C OF THE ACT, THE MARKET VALUE DETERMINED BY THE DISTRICT REGISTRAR AT RS.17,17,78,000/ - REQUIRED TO BE ADO PTED FOR COMPUTING THE CAPITAL GAINS IN PLACE OF THE FULL VALUE OF SALE CONSIDERATION ADMITTED BY THE ASSESSEE AT RS.10,56,32,000/ - . ACCORDINGLY, THE AO ISSUED SHOW CAUSE NOTICE AND IN RESPONSE TO WHICH THE ASSESSEE FILED OBJECTIONS REQUESTING TO CONSIDER THE SALE CONSIDERATION AT RS.10,56,32,000/ - , BUT NOT RS.17,17,78,000/ - . THE ASSESSEE FURTHER 4 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY SUBMITTED THAT HE HAD RECEIVED THE ACTUAL SALE CONSIDERATION AS PER THE ORIGINAL AGREEMENT OF SALE DATED 16.11.2010 WHICH WAS VALUED @RS.16,000/ - PER SQ.YARD OF THE SUBJECT PROPERTY. THE GUIDELINE VALUE OF THE PROPERTY IS AT RS.12,000/ - PER SQ.YARD AS ON 18.04.2011 AND ON 01.11.2011 I.E. EVEN AFTER THE SALE OF THE SAID PROPERTY AS PER THE INFORMATION AVAILABLE WITH THE REGISTERING AUTHORITY. THE ASSESSEE HAD PLA CED THE RELEVANT EVIDENCES BEFORE THE AO FROM THE REGISTRATION AUTHORIT IES . THE ASSESSEE FURTHER SUBMITTED THAT IT WAS NOT UNDERSTOOD AS TO WHY THE DISTRICT REGISTRAR, KAKINADA VIDE HIS PROCEEDINGS DATED 04.03.2011 HAS FIXED THE MARKET VALUE OF THE SUBJEC T PROPERTY AT RS.26,000/ - AS AGAINST THE EXISTING VALUE OF RS.12,000/ - PER SQ.YARD. THE DISTRICT REGISTRAR IN HIS PROCEEDINGS DATED 04.03.2011 HAS NOT GIVEN ANY REASONS EXCEPT STATING THAT HE MADE THE SPOT ENQUIRY. HE DID NOT BRING ANY OTHER EVIDENCE OR COMPARABLE CASE FOR FIXING THE VALUE OF RS.26,000/ - PER SQ.YARD. THUS, THE ASSESSEE ARGUED THAT THE ORDER OF THE DISTRICT REGISTRAR WAS FAULTY AND THE GUIDELINE VALUE OF THE VACANT SITE IN THE AREA SUBSEQUENT TO THE REGISTRATION OF THE DOCUMENT ALSO WAS LESSER THAN THE VALUE ADOPTED BY THE DISTRICT REGISTRAR. HENCE, ARGUED THAT SINCE THE DISTRICT REGISTRARS REPORT IS FAULTY AND THE SAME CANNOT BE TAKEN FOR THE PURPOSE OF CAPITAL 5 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY GAINS AND THE VALUE ADOPTED IN THE SALE AGREEMENT ON 16.11.2010 WHICH WAS REGISTERED AT RS.10,56,32,000/ - REQUIRED TO BE CONSIDERED AND ADOPTED FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS. THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECISIONS A) DY.CIT, CIRCLE - 11(1), HYDERABAD VS. S.VENKAT REDDY, HYDERABAD IN ITA NO.974/HYD/2010, ASSESSMENT YEAR 2006 - 07 BY THE HONBLE ITAT, HYDERABAD, BENCH - B, HYDERABAD DATED 09.11.2012) B) MOOLE RAMI REDDY, VISAKHAPATNAM VS. ITO, WARD - 1(2), VISAKHAPATNAM IN ITA NO.311/VIZAG/2010, ASS ESSMENT YEAR 2006 - 07 BY THE HONBLE ITAT, VISAKHAPATNAM BENCH, VISAKHAPATNAM DATED 10.12.2010. 3.1. THE AO CONSIDERED THE EXPLANATION OFFERED BY THE ASSESSEE BUT DID NOT FIND MERIT IN THE ASSESSEES REQUEST TO CONSIDER THE SALE DEED VALUE DUE TO THE FOLLOW ING REASONS : ( A ) IT IS AN UNDISPUTED FACT THAT THE MARKET VALUE OF THE PROPERTY SOLD WAS DETERMINED AT RS.17,17,78,000 BY THE DISTRICT REGISTRAR & COLLECTOR U/S 47(A) OF THE I.S.ACT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY VIDE PROCEEDINGS NO.G2/MV/486/2011 D ATED 04.03.2011. (B) IT IS ALSO AN UNDISPUTED FACT THAT THE DIFFERENCE OF STAMP DUTY OF RS.46,19,820 WAS PAID BY THE PURCHASER OF THE SAID PROPERTY ON 04.03.2011. (C) THESE ABOVE MENTIONED TWO FACTS WERE CLEARLY ENDORSED ON THE REVERSE OF THE 6 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY 4 TH PAGE OF THE REGISTERED SATE DEED DATED 28.02.2011, A COPY OF WHICH IS AVAILABLE WITH THE ASSESSEE FROM THE BEGINNING. IN FACT, THE SAID COPY OF THE SATE DEED DULY INCORPORATED/ENDORSED WITH THE FACTS MENTIONED IN PARAS (A) & (B) ABOVE, WAS FURNISHED BY THE ASSES SEE - FIRM ITSELF THROUGH THE LETTER DATED 09.122013 IN OTHER WORDS, ALL THESE FACTS ARE WELL WITHIN THE KNOWLEDGE OF THE ASSESSEE FIRM. (D) THE ASSESSEE HAS SUBMITTED THAT THE MARKET VALUE OF THE PROPERTY IN D.NO.2 - 4 - 34 IS RS.12,000 PER SQ. YD AS ON 18.04.2011 & 01.11.2011 BASING ON THE CERTIFICATES ISSUED BY THE JOINT SUB - REGISTRARS, KAKINADA. ON VERIFICATION OF THESE CERTIFICATES VIS - A - VIS THE COPY OF THE RELEVANT SALE DEED DATED 28.02.2011 THE FOLLOWING STRIKING DIFFERENCES ARE NOTICED: (I) THE NAT URE OF USE OF THE PROPERTY IS MENTIONED AS 'COMMERCIAL' SITE IN THE SALE DEED,WHEREAS THE NATURE OF USE OF THE PROPERTY IS MENTIONED AS 'RESIDENTIAL' IN THE MARKET VALUE CERTIFICATES SUBMITTED BY THE ASSESSEE. (II) THE LOCALITY OF THE PROPERTY IS M ENTIONED AT SURYARAOPE TA (RELATED D.NO.2 - 4 - 34) IN THE SALE DEED, WHEREAS THE LOCALITY IS MENTIONED AS SRINAGAR IN THE MARKET VALUE CERTIFICATE DATED 10 /04/ 2011 AND THE LOCALITY IS NOT AT ALL MENTIONED IN THE CERTIFICATE DATED 11.03.2013. ( III ) IN THE CERTIFICATE DATED 11.03.2011 ! THED.NO IS MENTIONED AS 2 - 4 - 36, WHEREAS THE D.NO. IS MENTIONED AS 2 - 4 - 34 IN THE SALE DEED. ( IV ) SURVEY NOS. ARE MENTIONED AS 158P & 154P IN THE SALE DEED, WHEREAS THE SURVEY NO IS MENTIONED AS 152 IN THE CERTIFICATE DATED 10.04.2011 & NO SURVE Y NO. IS MENTIONED IN THE CERTIFICATE DATE I 1.03.2013. FOR THESE REASONS, THE MARKET VALUES MENTIONED IN THE TWO CERTIFICATES DATED 11.03.2011 & 10.03.2013 ARE NOT WORTH TO BE CONSIDERED IN THIS REGARD. (E) IN TERMS OF SUB - SECTION (1) OF SECTION 50C OF THE INCOME TAX ACT, 1961, THE VALUE OF THE PROPERTY ADOPTED / DETERMINED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER. 3.2. THE AO DISTINGUISHED THE CASE LAWS RELIED UPON BY THE ASSESSEE AND HELD THAT AS PER SECTION 50C, THE MARKET VALUE DETERMINED BY THE DISTRICT REGISTRAR U/S 47(A) OF THE INDIAN STAMPS ACT REQUIRED TO BE ADOPTED FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS . ACCORDINGLY ADOPTED THE FULL VALUE OF SALE CONSIDERATION AT RS.17,17,78,000/ - FOR THE PURPOSE OF CAPITAL GAINS AND COMPUTED THE CAPITAL GAINS AND BROUGHT TO TAX THE SUM OF RS. 7 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY 16,55,10,331 UNDER THE HEAD LONG TERM CAPITAL GAINS. 4. AGGRIEVED BY THE OR DER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) UPHELD THE ORDER OF THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. THE LD.CIT(A) IN HIS ORDER ENDORSED THE VIEW OF THE AO HOLDING THAT THE SALE CONSIDERATION REQUIRED TO BE AD OPTED AS PER THE SALE DEED, BUT NOT AS PER THE SALE AGREEMENT. 5. AGAINST THE ORDER OF THE CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD.AR MADE TWO FOLD ARGUMENTS. FIRSTLY THE LD.AR ARGUED THAT THE ASSESSEE HA S TRANSFERRED THE PROPERTY ON 16.11.2010 BY WAY OF AGREEMENT OF SALE COUPLED WITH POSSESSION AND HAS TRANSFERRED THE LAND AND HANDED OVER THE POSSESSION OF THE LAND TO THE VENDEE. THEREFORE AS PER SECTION 2(47) OF THE ACT THE TRANSFER WAS COMPLETED ON 16. 10.2010. THE AGREEMENT ALSO WAS REGISTERED AND THE ASSESSEE HAD RECEIVED THE PART OF THE SALE CONSIDERATION OF RS.5.00CRORES THROUGH DEMAND DRAFT BEARING NO.063001 DATED 16.11.2010 DRAWN ON KOTAK MAHINDRA BANK, VISAKHAPATNAM. AS PER THE AGREEMENT, THE PU RCHASER HAS TO PAY THE BALANCE AMOUNT OF RS.5,56,32,000/ - AT THE TIME OF REGISTRATION OF SALE DEED FOR THE SCHEDULED PROPERTY AND ACCORDINGLY PAID THE BALANCE CONSIDERATION ON 26.02.2011 AT THE TIME OF REGISTRATION OF THE 8 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY SALE DEED . THE SALE AGREEMENT WAS REGISTERED AND AS PER THE ENDORSEMENT MADE IN THE REGISTERED SALE AGREEMENT, BOTH THE JOINT SUB REGISTRAR AND THE VENDOR HAVE AGREED FOR THE MARKET VALUE AT RS.10,56,32,000/ - WHICH IS EVIDENT FROM THE SALE DEED PLACED IN PAGE NO.65 OF THE PAPER BOOK. THE REFORE, ARGUED THAT THE POSSESSION OF LAND WAS ALREADY GIVEN, THE SALE AGREEMENT WAS REGISTERED AND THE PAYMENT WAS MADE BY CHEQUE , HENCE THE FULL VALUE OF SALE CONSIDERATION AS ON THE DATE OF AGREEMENT HAS TO BE CONSIDERED, BUT NOT THE STAMP VALUE AS ON T HE DATE OF SALE DEED AND SUBSEQUENT ENHANCEMENT HAS NO APPLICATION IN THE ASSESSEES CASE. 5.1. ALTERNAT IVE LY THE LD.AR ARGUED THAT EVEN AFTER REGISTRATION OF THE SALE DEED THE M A RKET VALUE IS TO BE TAKEN AS RS.10,5632,000/ - BUT NOT THE SUM OF RS.17,17,7 8,000/ - AS FIXED BY THE DISTRICT REGISTRAR. DUE DISPUTE RAISED BY THE ASSESSEE T HOUGH THE ITO HAS REFERRED THE ISSUE TO THE DISTRICT VALUATION OFFICER (DVO), THE DVO HAS TREATED THE REFERENCE AS INVALID IN VIEW OF THE PENDENCY OF STAMP DUTY VALUATION IN TH E HIGH COURT VIDE LETTER DATED 31.03.2016 TO ITO. THE LD.AR FURTHER ARGUED THAT THE DISTRICT REGISTRAR HAS MERELY STATED TO HAVE CONDUCTED THE SPOT ENQUIRY AND FIXED THE VALUE OF THE PROPERTY AT THE VALUE OF RS.26,000/ - AGAINST THE ACTUAL MARKET VALUE OF R S.12,000/ - ARBITRARILY WITHOUT ASSIGNING ANY REASON OR 9 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY BRINGING ANY DOCUMENT TO SUPPORT THE VALUATION OF RS.26,000/ - PER SQ.YARD. THE ASSESSEE OBTAINED THE MARKET VALUE CERTIFICATE FROM THE JOINT SUB REGISTRAR AS ON 16.11.2010 WHICH WAS VALUED AT RS.16,00 0/ - PER SQ.YARD AND THE SAME WAS ADOPTED BY THE ASSESSEE IN THE SALE DEED. THE PROPERTY WAS BEARING D.NO.2 - 4 - 34, KAKINADA AND VALUATION GIVEN BY THE JOINT SUB REGISTRAR AS ON 18.04.2011 WAS RS.12,000/ - , BUT NOT RS.26,000/ - AS FIXED BY THE DISTRICT REGIST RAR EVEN AFTER THE SALE . THE ASSESSEE ALSO ENCLOSED MARKET VALUE CERTIFICATE DATED 08.06.2017 OBTAINED FROM THE JOINT SUB REGISTRAR, KAKINADA, AS PER WHICH THE MARKET VALUE FOR THE D.NO.2 - 4 - 34 WAS CONTINUED TO BE AT RS.12,000/ - AS ON 28.02.2011 EVEN AFTE R THE DATE OF ENHANCING THE VALUE SUBSEQUENT TO THE PROCEEDINGS OF THE DISTRICT REGISTRAR, KAKINADA. THEREFORE, ARGUED THAT THE MARKET VALUE OF THE PROPERTY FOR THE PURPOSE OF STAMP DUTY AS ON 28.02.2011 WAS ONLY RS.12,000/ - PER SQ.YARD, BUT NOT RS.26,000 / - PER SQ.YARD AS FIXED BY THE DISTRICT REGISTRAR. THE VALUATION MADE BY THE DISTRICT REGISTRAR WAS ARBITRARY HENCE ARGUED THAT THE SAME SHOULD NOT BE ADOPTED FOR CAPITAL GAINS PURPOSE AND IT WOULD CAUSE FINANCIAL INJURY TO THE ASSESSEE. THOUGH THE PURCHA SER HAS PAID THE STAMP DUTY THE SAME IS IN DISPUTE, HENCE, ARGUED THAT THE MARKET VALUE AS ON 16.11.2010 AS PER THE SALE AGREEMENT 10 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY REQUIRED TO BE ADOPTED FOR THE PURPOSE OF CAPITAL GAINS, BUT NOT THE ENHANCED VALUE OF THE DISTRICT SUB REGISTRAR, KAKINADA. ACCORDINGLY, REQUESTED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO. 6. ON THE OTHER HAND, THE LD.DR ARGUED THAT THE ASSESSEE HAD ENTERED INTO SALE AGREEMENT ON 16.11.2010 AND THE SAME WAS REGISTERED FOR A CONSIDERATION O F RS.10,56,32,000/ - AND THE PART AMOUNT WAS PAID SUBSEQUENT TO SALE AGREEMENT AND THE LAND WAS REGISTERED BY SALE DEED ON 28.02.2011 AND THE JOINT SUB REGISTRAR HAS NOT RELEASED THE SALE DEED, SINCE, THERE WAS A DISPUTE IN THE VALUATION OF THE PROPERTY AND THE ISSUE WAS REFERRED TO THE DIST. REGISTRAR, KAKINADA FOR VALUATION OF THE PROPERTY U/S 47A OF THE INDIAN STAMPS ACT AND THE DISTRICT REGISTRAR HAS VALUED THE PROPERTY AT RS.17,17,78,000/ - @ RS.26,000/ - PER SQ.YARD FOR THE SITE ADMEASURING 6602 SQ.YARDS AND THE TOTAL MARKET VALUE WAS DETERMINED AT RS.17,17,78,000/ - . THE DISTRICT REGISTRAR HAS MADE SPOT INSPECTION AND MADE LOCAL ENQUIRIES BEFORE DETERMINING THE MARKET VALUE AND CONSIDERED ALL THE FACTS AVAILABLE. THEREFORE, THE DISTRICT REGISTRAR HAS RIGHTLY DETERMINED THE MARKET VALUE AND NO INTERFERENCE IS CALLED FOR IN THE DETERMINATION OF THE MARKET VALUE OF THE PROPERTY AS ON 28.02.2011. THE 11 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY LD.DR FURTHER ARGUED THAT THOUGH THE SALE AGREEMENT WAS REGISTERED ON 16.11.20 10 AND ADOPTED THE MARKET VALUE OF RS.10,56,32,000/ - , THE SAME WAS ENHANCED IN THE SALE DEED BY THE DISTRICT REGISTRAR, THEREFORE, THERE IS NO CASE FOR ADOPTING THE MARKET VALUE AT RS.10,56,32,000/ - AS DECIDED IN THE SALE AGREEMENT. SINCE THE MARKET VALUE WAS ENHANCED, THE SAME REQUIRED TO BE ADOPTED FOR COMPUTING THE CAPITAL GAINS. ACCORDINGLY ARGUED THAT THE AO HAS RIGHTLY MADE THE ADDITION AND THE LD.CIT(A) HAS RIGHTLY UPHELD THE ORDER OF THE AO AND NO INTERFERENCE IS CALLED FOR. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE HAS SOLD THE VACANT SITE OF 6603SQ.YARDS IN DOOR NO.2 - 4 - 34 ALONG WITH THE ACC BUILDING IN THE SITE FOR A CONSIDERATION OF RS.10,56,32,000/ - ON 28.02.2011. BEFORE EXECUTING THE SALE DEED, THE ASSESSEE HAD ENTERED INTO SALE AGREEMENT ON 16.11.2010 FOR SALE OF PROPERTY FOR A CONSIDERATION OF RS.10,56,32,000/ - VIDE SALE AGREEMENT CUM POSSESSION DATED 16.11.2010 WHICH WAS ALSO REGISTERED WITH THE JOINT SUB REGI STRAR. AS PER THE SALE AGREEMENT, THE ASSESSEE HAD RECEIVED PART AMOUNT OF RS.5.00 CRORES AND HAS GIVEN THE POSSESSION TO THE VENDEE AS EVIDENCED FROM THE SALE AGREEMENT COUPLED WITH POSSESSION DATED 16.11.2010 WHICH IS PLACED IN PAGE NOS.61 TO 78 OF 12 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY THE PAPER BOOK . I N TERMS OF AGREEMENT THE PURCHASER HAS ALSO PAID THE BALANCE CONSIDERATION ON 26.02.2011 AT THE TIME OF REGISTRATION OF SALE DEED . AS PER THE REGISTERED SALE AGREEMENT, THE MARKET VALUE WAS DETERMINED AT RS.10,56,32,000/ - AS ENDORSED BY THE SU B REGISTRAR ON 16.11.2010 IN PAGE NO.4 OF THE SAID DOCUMENT. THEREFORE, FOR ALL PRACTICAL PURPOSES, THE MARKET VALUE AS ON 16.11.2010 WAS DETERMINED BY THE STAMPS AND REGISTRATION AUTHORITIES OF STATE GOVERNMENT AT RS.10,56,32,000/ - . THE ASSESSEE HAD ALSO RECEIVED THE PART CONSIDERATION AND THE VENDEE HAD AGREED TO PAY THE BALANCE CONSIDERATION AT THE TIME OF REGISTRATION OF THE SALE DEED. THE PART PAYMENT WAS ALSO RECEIVED BY CROSSED CHEQUE. THE DOCUMENT WAS RELEASED AND THERE WAS NO EVIDENCE PLACED BY T HE REVENUE TO SHOW THAT THE MARKET VALUE AS ON 16.11.2010 WAS DISPUTED BY THE STAMPS AND REGISTRATION AUTHORITY OR REFERRED THE MATTER TO THE DISTRICT REGISTRAR FOR DETERMINATION. SUBSEQUENTLY, THE SALE DEED WAS PRESENTED FOR REGISTRATION BY ADOPTING THE SAME VALUE OF RS.10,56,32,000/ - ON 28.02.2011 WHICH WAS NOT ACCEPTED BY THE REGISTRATION AUTHORITIES AND REFERRED THE VALUATION TO THE DISTRICT REGISTRAR FOR FIXING THE VALUE AS ON 28.02.2011, I.E. THE DATE OF REGISTRATION. THE DISTRICT REGISTRAR HAS COND UCTED SPOT ENQUIRIES AND DETERMINED THE MARKET VALUE OF THE PROPERTY 13 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY AT RS.26,000/ - PER SQUARE YARD AND ACCORDINGLY VALUED THE SCHEDULED PROPERTY AT RS.17,17,78,000/ - . AS PER THE PROCEEDINGS OF THE DISTRICT REGISTRAR, THOUGH HE STATED TO HAVE CONDUCTED THE SPOT ENQUIRIES, NO COMPARABLE CASE WAS BROUGHT ON RECORD WHICH WAS REGISTERED AT RS.26,000/ - PER SQ.YARD. HOWEVER, IT IS MENTIONED IN THE DISTRICT REGISTRAR REPORT THAT THE MARKET RATE IS GOING ON AT RS.26,000/ - PER SQUARE YARD AS ON THE DATE OF EXECUTIO N OF THE DOCUMENT. FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE REPORT OF THE DISTRICT REGISTRAR WHICH READS AS UNDER : ON LOCAL ENQUIRY TRANSACTIONS FOR THE NEARBY SITES OF THE SCHEDULED PROPERTY OF THE DOCUMENT ARE GOING O N FOR ABOUT RS.26,000/ - OR SO PER SQUARE YARD AS ON THE DATE OF EXECUTION OF THIS DOCUMENT. THEREFORE, IT IS HELD TO BE REASONABLE TO FIX THE VALUE OF THE VACANT SITE OF THE SCHEDULED PROPERTY AS RS.26,000/ - PER SQUARE YARD ON THE BASIS OF THE SITUATION O F THE PROPERTY AND CONSIDERATION PAID BY THE VENDEES. 7.1. THE SIMPLE ISSUE IN THIS CASE IS , FOR THE PURPOSE OF DETERMINING THE FULL VALUE OF CONSIDERATION FOR COMPUTING THE CAPITAL GAINS IS TO BE TAKEN AS PER THE SALE AGREEMENT OR THE SALE DEED? IN THE INSTANT CASE THE ASSESSEE HAD ENTERED IN TO SALE AGREEMENT , THE SAME WAS REGISTERED, THE POSSESSION WAS GIVEN AND THE PART PAYMENT WAS RECEIVED BY CHEQUE. ALL THESE TRANSACTIONS WERE COMPLETED ON 16 . 11 . 2010. ON THE SIMILAR FACTS THE COORDINATE BENCH OF T HIS TRIBUNAL IN THE CASE OF APPANA HARI NAGA VENKAT RAO VS. ITO, WARD - 1, 14 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY VISAKHAPATNAM VIDE I.T.A. NO. 222/VIZ/2017 D ATED 06.02.2019 CONSIDERED THE ISSUE AND HELD THAT THE SALE CONSIDERATION AS ON THE DATE OF AGREEMENT IS TO BE TAKEN FOR THE PURPOSE OF COM PUTING THE CAPITAL GAINS. FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THIS TRIBUNAL WHICH READS AS UNDER : 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. 10 . THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER TO ASCERTAIN THE VALUE OF THE PROPERTY AS PER SECTION 50C IT HAS TO BE TAKEN ON THE DATE OF SALE AGREEMENT DATED 17/07/2010 OR ON THE DATE OF SALE DEED DATED 08/10/2010. THE ASSESSE E HAS ENTERED INTO A SALE AGREEMENT DATED 17/07/2010 TO SELL THE PROPERTY ADMEASURING 1941.51 SQ.YRDS. FOR SALE A CONSIDERATION OF RS. 1.90 CRORES AND RECEIVED ADVANCE OF RS. 80.00 LAKHS THROUGH BANKERS CHEQUE NO.756358, DATED 14/07/2010. THE ASSESSEE HAS TO RECEIVE THE REMAINING BALANCE OF RS. 1.10 CRORES ON OR BEFORE 30/08/2010. HOWEVER, THE ASSESSEE HAS RECEIVED 99.00 LAKHS ON 04/10/2010, 1.00 LAKH ON 04/10/2010 AND RS.10.00 LAKHS ON 08/10/2010 I.E. ON THE DATE OF REGISTRATION OF SALE DEED. NOW THE QUE STION IS FOR THE PURPOSE OF ASCERTAINING THE VALUE AS PER SECTION 50C, WHETHER THE DATE OF AGREEMENT HAS TO BE CONSIDERED OR DATE OF SALE DEED HAS TO BE CONSIDERED. ACCORDING TO THE ASSESSEE ON THE DATE OF AGREEMENT DATED 17/07/2010, THE SRO VALUE IS MUCH LESSER THAN THE SALE PRICE AGREED BY THE ASSESSEE OF RS.1.90 CRORES, THEREFORE, THE AMOUNT AGREED ON THE DATE OF AGREEMENT HAS TO BE CONSIDERED AND NOT ON SUBSEQUENT DATE I.E. DATE OF REGISTRATION OF THE SALE DEED. THE CASE OF THE ASSESSING OFFICER IS TH AT THE AGREEMENT ENTERED BY THE ASSESSEE WITH THE PURCHASER IS UNREGISTERED AGREEMENT, THEREFORE, THERE IS NO VALIDITY IN THE EYE OF LAW, HENCE, AS PER SECTION 50C THE VALUE HAS TO BE DETERMINED ON THE DATE OF SALE DEED. ACCORDINGLY, THE ASSESSING OFFICER ADOPTED SRO VALUE OF RS. 2,95,02,500/ - . ON APPEAL, LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE LD. CIT(A) FURTHER OBSERVED THAT PURCHASER HAS NOT FULFILLED THE CONDITIONS LAID DOWN IN THE UNREGISTERED SALE AGREEMENT, THEREFORE, THE VAL UE OF THE PROPERTY HAS TO BE CONSIDERED AS ON THE DATE OF SALE DEED AND NOT ON THE SALE AGREEMENT. WE FIND THAT THE ASSESSEE BY ENTERING INTO AGREEMENT, HE HAS RECEIVED SUBSTANTIAL AMOUNT I.E. RS. 80 LAKHS THROUGH BANKING CHANNELS AND BOTH THE PARTIES BOU ND BY THE AGREEMENT AND THE PURCHASE HAVE INTEREST ON THE PROPERTY I.E. AS SALE AGREEMENT DATED 17/07/2010. THE ASSESSEE HAS TO SELL THE PROPERTY TO THE PURCHASER AS PER THE 15 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY SALE AGREEMENT EVEN THOUGH THE SALE AGREEMENT IS NOT A REGISTERED. THE LD. CIT(A ) IS NOT CORRECT IN SAYING THAT THE UNREGISTERED SALE AGREEMENT NOT VALID IN THE EYE OF LAW. SO FAR AS LAPSES COMMITTED BY THE PURCHASER ARE CONCERNED, ONCE THE ASSESSEE ACCEPTED THE REMAINING AMOUNT SUBSEQUENT TO THE DATE OF 30/08/2010, IT IMPLIES THE AS SESSEE HAS ACTED IN ACCORDANCE WITH THE TERMS OF AGREEMENT DATED 17/07/2010. THEREFORE, LD. CIT(A) IS NOT CORRECT IN SAYING THAT THE PURCHASER FAILED TO FULFIL THE CONDITIONS LAID DOWN IN THE AGREEMENT, THEREFORE, THE ASSESSEE NEED NOT SELL THE PROPERTY F OR THE SAME PRICE. THE COORDINATE BENCH OF THE AHMADABAD TRIBUNAL, B' BENCH IN THE CASE OF RAHUL G. PATEL (SUPRA) HAS CONSIDERED THE ISSUE IN RESPECT OF UNREGISTERED SALE AGREEMENT VIS - A - VIS APPLICATION OF PROVISO TO SECTION 50C HELD AS UNDER: - 8. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. SECTION 48 OF THE INCOME TAX ACT PROVIDES MODE OF COMPUTATION OF CAPITAL GAIN. IT CONTEMPLATES THAT INCOME ARISING UNDER THE HEAD 'CAPITAL GAINS' SHALL BE COMPUTED BY DEDUCTING F ROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING, AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSETS THE FOLLOWING AMOUNTS, VIZ. (A) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER; AND (B) THE COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROVEMENT THERETO. 9. SECTION 50C FURTHER PROVIDES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION. IN OTHER WORDS,FULL CONSIDERATIO N MENTIONED IN SECTION 48 IS TO BE REPLACED BY THE CONSIDERATION ON WHICH VALUE OF THE PROPERTY WAS ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. 10. SUB - SECTION (2) OF SECTION 50C FURTHER CONTEMPLATES THAT IN CASE ASSESSEE ALLEGES THAT STAMP DUTY VAL UATION AUTHORITY UNDER SUB - SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, THEN, THE AO MAY REFER THE VALUATION OF THE CAPITAL ASSET TO THE VALUATION OFFICER. SUB - CLAUSE (V) OF SECTION 2(47) HAS A DIRECT BEARING ON THE CONTROVERSY. THEREFORE, IT IS PERTINENT TO TAKEN NOTE OF THIS CLAUSE. IT READS ASUNDER: 'SECTION 2 . . . . . . . . . . . . . . . . (47) 'TRANSFER', IN RELATION TO A CAPITAL ASSET, INCLUDES, (I) TO (IVA) (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE 16 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) ; OR' 11. BEFORE TAKING COGNIZANCE OF ANY ARGUMENT, IT IS PERTINENT TO TAKE NOTE OF REGISTRATION AND OTHER RELATED LAWS, AMENDMENT ACT, 2001 WHICH HAS BROUGHT ABOUT RADICAL CHANGES IN THE RIGHTS FLOWING ON THE BASIS OF THE AGREEMENT EXECUTED IN PART PERFORMANCE OF THE CONTRACT UNDER SECTION 53A OF 1882 ACT. THE AMENDMENTS HA VE BEEN MADE TO SECTIONS 17 AND 49 OF THE INDIAN REGISTRATION ACT, 1908. IT IS PERTINENT TO TAKE NOTE OF SECTION 17(1A) AS WELL AS SECTION 49 OF THE REGISTRATION ACT. '17.(1A) THE DOCUMENTS CONTAINING CONTRACTS TO TRANSFER FOR CONSIDERATION, ANY IMMOVABLE PROPERTY FOR THE PURPOSE OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) SHALL BE REGISTERED IF THEY HAVE BEEN EXECUTED ON OR AFTER THE COMMENCEMENT OF THE REGISTRATION AND OTHER RELATED LAWS (AMENDMENT) ACT, 2001 AND IF SUCH DOCUMENTS AR E NOT REGISTERED ON OR AFTER SUCH COMMENCEMENT, THEN, THEY SHALL HAVE NO EFFECT FOR THE PURPOSES OF THE SAID SECTION 53A. 49. EFFECT OF NON - REGISTRATION OF DOCUMENTS REQUIRED TO BE REGISTERED. NO DOCUMENT REQUIRED BY SECTION 17 1[OR BY ANY PROVISION OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882)], TO BE REGISTERED SHALL ( A ) AFFECT ANY IMMOVABLE PROPERTY COMPRISED THEREIN, OR ( B ) CONFER ANY POWER TO ADOPT, OR ( C ) BE RECEIVED AS EVIDENCE OF ANY TRANSACTION AFFECTING SUCH PROPERTY OR CONFERRING SUCH POWER, UNLESS IT HAS BEEN REGISTERED: PROVIDED THAT AN UNREGISTERED DOCUMENT AFFECTING IMMOVABLE PROPERTY AND REQUIRED BY THIS ACT OR THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882), TO BE REGISTERED MAY BE RECEIVED AS EVIDENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PERFORMAN CE UNDER CHAPTER II OF THE SPECIFIC RELIEF ACT, 1877 (3 OF 1877) OR AS EVIDENCE OF ANY COLLATERAL TRANSACTION NOT REQUIRED TO BE EFFECTED BY REGISTERED INSTRUMENT.]' 12. WE ALSO DEEM IT PERTINENT TO TAKE NOTE OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT , 1882. IT READS ASUNDER: '53A. PART PERFORMANCE. WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVEABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH R EASONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSION IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT IN FURTHERANCE OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED OR IS 17 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLETED IN THE MANNER PRESCR IBED THEREFOR E BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANSFEREE HAS T AKEN OR CONTINUED IN POSSESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF THE CONTRACT OR OF THE PART PERFORMANC E THEREOF.' 13. A PERUSAL OF SECTION 53A OF THE TPA WOULD INDICATE THAT IT PROVIDES A PROTECTION TO TRANSFEREE TO RETAIN HIS POSSESSION WHICH WAS TAKEN IN PART PERFORMANCE OF THE CONTRACT. HE WAS ABLE TO PROTECT HIS POSSESSION EVEN AFTER EXPIRY OF LIMITAT ION TO BRING A SUIT FOR SPECIFIC PERFORMANCE. BUT AFTER THE AMENDMENT EFFECTED IN THE REGISTRATION AND OTHER RELATED LAWS AMENDMENT ACT, 2001, IT HAS BEEN PROVIDED THAT THOUGH A CONTRACT ACCOMPANIED BY EITHER OF POSSESSION OR EXECUTED IN FAVOUR OF A PERSON IN POSSESSION IS COMPULSORILY REGISTERABLE UNDER SECTION 17(1A) OF THE REGISTRATION ACT, 1908, IF HE FAILED TO REGISTER SUCH CONTRACT, THEN, HE WOULD NOT BE ABLE TO PROTECT HIS POSSESSION OR ANY BENEFIT CONFERRED BY SECTION 53A OF THE TPA. PROVISO APPENDE D TO SECTION 49 OF THE INDIAN REGISTRATION ACT ONLY POSTULATES THAT SUCH AGREEMENT COULD BE TENDERED IN EVIDENCE IN A SUIT FOR SPECIFIC PERFORMANCE. IN OTHER WORDS, VALIDITY OF UNREGISTERED AGREEMENT HAS NOT BEEN DENIED FOR THE PURPOSE OF ADDUCING IT AS EV IDENCE FOR OBTAINING THE BENEFIT FLOWING FROM SUCH CONTRACT. BUT FOR THE PURPOSE OF PROTECTING THE POSSESSION, UN - REGISTERED CONTRACT COULD NOT BE ENFORCED. THE 'TRANSFER' WITHIN THE MEANING OF SECTION 2(47) OF THE INCOME TAX ACT WOULD COMPLETE, IF POSSESS ION IS PROTECTED. THUS ON EXECUTION O F AN AGREEMENT, IF IT WAS NOT REGISTERED THE TRANSFER WITHIN THE MEANING OF SECTION 2(47) WILL NOT HAPPEN. LIKE IN THE PRESENT CASE, AGREEMENT WAS EXECUTED ON 8.2.2010 BUT NOT REGISTERED. THEREFORE, IT IS TO BE CONSTRUE D THAT TRANSFER DID NOT TAKE PLACE ON 8.2.2010 RATHER TOOK PLACE ON 5.6.2012 WHEN SALE DEED WAS EXECUTED AND REGISTERED. THIS MAY BE THE REASON FOR THE ASSESSEE TO OFFER CAPITAL GAIN IN THE ASST.YEAR 2013 - 14 ONLY. 14. IT IS PERTINENT TO OBSERVE THAT AN AGREEMENT TO SALE WAS EXECUTED BY THE ASSESSEE ON 8.2.2010 WHICH IS FOLLOWED BY PAYMENT THROUGH ACCOUNT PAYEE CHEQUE. DETAILS OF PAYMENTS HAVE BEEN DULY NOTICED BY THE LD.AO AS WELL AS BY THE LD.CIT(A). FIRST CHEQUE WAS R ECEIVED ON 1.4.2011 FOR A CONSIDERATION OF RS.10 LAKHS; THEN RS.30 LAKHS ON 23.7.2011; RS.15 LAKHS ON 28.12.2011 AND RS.50 LAKHS ON 26.3.2012. SIMILARLY ON 1.5.2012 RS.45 LAKHS WAS RECEIVED THROUGH ACCOUNT PAYEE CHEQUE. IT MEANS THAT SALE CONSIDERATION WER E RECEIVED BY THE ASSESSEE BEFORE THE REGISTRATION OF SALE DEED REGULARLY ON DIFFERENT INTERVALS. AS OBSERVED 18 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY EARLIER, SECTION 50C PROVIDES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION. THE QUESTION BEFORE US IS, WHAT COULD BE THE FULL VALUE OF SALE CONSIDERATION I.E. WHETHER THE VALUE ON WHICH STAMP DUTY WAS PAID AT THE TIME OF SALE DEED OR THE VALUE DECLARED IN THE SALE AGREEMENT ? IN SUCH A SITUATION WHERE THE AS SESSEE IS NOT SATISFIED WITH ADOPTION OF SALE VALUE ON WHICH STAMP DUTY WAS PAID, THEN SCHEME OF THE ACT PRESCRIBES A MECHANISM UNDER SUB - SECTION (2) OF SECTION 50C FOR MAKING A REFERENCE TO THE DVO TO DETERMINE FAIR MARKET VALUE OF THE PROPERTY. THE REASO NS FOR SUCH A MECHANISM IS THAT STAMP DUTY FEE IS ONLY 4.95% (HEREIN GUJARAT) ON THE TOTAL SALE CONSIDERATION, WHICH IS A SMALL AMOUNT AND CAN BE BORNE BY ANY VENDOR/VENDEE. BUT FOR THE PURPOSE OF INCOME TAX ACT, THE LIABILITY WOULD ENHANCE MULTI FOLD, AND DUE TO THIS REASON, MECHANISM HAS BEEN PROVIDED IN THE ACT FOR THE ASSESSEE TO DEMONSTRATE THAT THE VALUE RECEIVED BY HIM WAS FAR LESS THAN ONE ADOPTED FOR THE PURPOSE OF STAMP DUTY VALUATION. FOR THIS, HE CAN MAKE A REQUEST TO THE AO UNDER SECTION 50C(2) FOR MAKING A REFERENCE TO THE DVO. IT IS PERTINENT TO OBSERVE THAT THE ASSESSEE ENTERED INTO AN AGREEMENT TO SELL ON 8.2.2010. THE AO HAS NOT DISPUTED THIS AGREEMENT. THE ASSESSEE HAS RECEIVED PAYMENT IN PURSUANCE OF THIS AGREEMENT THROUGH ACCOUNT PAYEE C HEQUE. LET US TAKE A SITUATION WHERE A VENDEE FAILS TO GET THE SALE DEED EXECUTED. THE ASSESSEE BEING VENDOR HAS A REMEDY FOR FILING A SUIT FOR SPECIFIC PERFORMANCE UNDER THE SPECIFIC RELIEF ACT. THE TIME LIMIT TO FILE A SUIT FOR SPECIFIC PERFORMANCE HAS BEEN PROVIDED IN INDIAN LIMITATION ACT, WHICH IS THREE YEARS. IN SUCH SITUATION, WHEN THE VENDOR FILES A SUIT FOR SPECIFIC PERFORMANCE TO FORCE THE VENDEE TO PURCHASE THE PROPERTY. IN THAT SITUATION, HE WILL NOT PAY ANYTHING OVER AND ABOVE, THE AMOUNT STAT ED IN THE SALE AGREEMENT. IN THAT SITUATION, THE ASSESSEE WOULD NOT GET ANYTHING MORE THAN THE AMOUNT MENTIONED IN THE AGREEMENT, THOUGH SUCH SITUATION MAY ARISE AFTER THREE - FOUR YEARS ON EXECUTION OF THE DECREE PASSED IN A SUIT FOR SPECIFIC PERFORMANCE. IN BETWEEN THERE MAY AN APPRECIATION OR DEPRECIATION IN THE SAID PROPERTY. CIRCLE RATE MAY RISE OR REDUCE. IN OTHER WORDS, AT THE TIME OF AN AGREEMENT IN RESPECT OF AN IMMOVABLE PROPERTY, A RIGHT IN PERSONA IS CREATED IN FAVOUR OF THE TRANSFEREE/VENDEE. WH EN SUCH RIGHT IS CREATED IN FAVOUR OF THE VENDEE, THE VENDOR IS RESTRAINED FROM SELLING THE SAID PROPERTY TO SOMEONE ELSE BECAUSE VENDEE IN WHOSE FAVOUR RIGHT IN PERSONA IS CREATED HAS LEGITIMATE RIGHT TO ENFORCE SUCH SPECIFIC PERFORMANCE OF THE AGREEMENT, IF THE VENDOR FOR SOME REASON IS NOT EXECUTING THE SALE DEED. THUS, BY VIRTUE OF AGREEMENT TO SELL, SOME RIGHT IS GIVEN TO THE VENDEE BY THE VENDOR. IT IS ENCUMBRANCE ON THE PROPERTY. AT THIS STAGE, WE WOULD LIKE TO MAKE REFERENCE TO NEW PROVISO APPENDED TO SECTION 50C BY WAY OF FINANCE ACT, 2016 AND THE BACKGROUND, UNDER WHICH SUCH PROVISION HAS BEEN INCORPORATED. IN 2015, GOVERNMENT OF INDIA HAS SET UP INCOME TAX SIMPLICATION COMMITTEE HEADED BY 19 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY JUSTICE R.V.EASWAR, FORMER JUDGE OF DELHI HIGH COURT. THE COMMITTEE IN ITS REPORTED OBSERVED ASUNDER: 6.1 RATIONALISATION OF SECTION 50C TO PROVIDE RELIEF WHERE SALE CONSIDERATION FIXED UNDER AGREEMENT TO SELL SECTION 50C MAKES A SPECIAL PROVISION FOR DETERMINING THE FULL VALUE OF CONSIDERATION IN CASES OF TRANS FER OF IMMOVABLE PROPERTY. IT PROVIDES THAT WHERE THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (I.E. '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 BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION, AND CAPITAL GAINS SHALL BE COMPUTED ON THE B ASIS OF SUCH CONSIDERATION UNDER SECTION 48 OF THE INCOME - TAX ACT. THE SCOPE OF SECTION 50C WAS EXTENDED W.E.F. A.Y. 2010 - 11 TO THE TRANSACTION WHICH WERE EXECUTED THROUGH AGREEMENT TO SELL OR POWER OF ATTORNEY BY INSERTING THE WORD 'ASSESSABLE' ALONG WITH WORDS 'THE VALUE SO ADOPTED OR ASSESSED'. HENCE, SECTION 50C IS NOW ALSO APPLICABLE IN CASE OF SUCH TRANSFERS. THE PRESENT PROVISIONS OF SECTION 50C DO NOT PROVIDE ANY RELIEF WHERE THE SELLER HAS ENTERED INTO AN AGREEMENT TO SELL THE ASSET MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION HAS BEEN FIXED IN SUCH AGREEMENT. A LATER SIMILAR PROVISION INSERTED BY WAY OF SECTION 43CA DOES TAKE CARE OF SUCH A SITUATION. 6.2 IT IS THEREFORE PROPOSED TO INSERT THE FOLLOWI NG PROVISIONS IN SECTION 50C: (4) WHERE THE DATE OF AN AGREEMENT FIXING THE VALUE OF CONSIDERATION FOR THE TRANSFER OF THE ASSET AND THE DATE OF REGISTRATION OF THE TRANSFER OF THE ASSET ARE NOT SAME, THE VALUE REFERRED TO IN SUB - SECTION (1) MAY BE TAKEN A S THE VALUE ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER ON THE DATE OF TH EAGREEMENT. (5) THE PROVISIONS OF SUB - SECTION (4) SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERAT ION OR A PART THEREOF HAS BEEN RECEIVED BY ANY MODE OTHER THAN CASH ON OR BEFORE A DATE OF AGREEMENT FOR TRANSFER OF THE ASSET. 15. TAKING A CLUE FROM THE REPORT, A PROVISO HAS BEEN APPENDED BY WAY OF FINANCE ACT, 2016 TO SECTION 50C AND SUCH PROVISO R EADS ASUNDER: '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 AUTHORIT Y ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER: 20 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY 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, ON OR BEFORE THE DATE OF THE AGREEMENT FOR TRANSFER.' 16. THIS AMENDMENT WAS EXPLAINED IN THE MEMORANDUM EXPLAINING THE PROVISIONS OF FINANCE BILL 2016. IT READS ASUNDER: RATIONALIZATION OF SECTION 50C IN CASE SALE CONSIDERATION IS FIXED UNDER AGREEMENT EXECUTED PRIOR TO THE DATE OF REGISTRATION OF IMMOVABLE PROPERTY UNDER THE EXISTING PROVISIONS CONTAINED IN SECTION 50C, IN CASE OF TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING ON BOTH, THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF CAPITAL GAINS. THE INCOME TAX SIMPLIFICATION COMMITTEE (EASWAR COMMITTEE) HAS IN ITS FIRST REPORT, POINTED OUT THAT THIS PROVISION DOES NOT PROVIDE ANY RELIEF WHERE THE SELLER HAS ENTERED INTO AN AGREEMENT TO SELL THE PROPERTY MUCH BEFORE THE ACTUAL DATE OF TRANS FER OF THE IMMOVABLE PROPERTY AND THE SALE CONSIDERATION IS FIXED IN SUCH AGREEMENT, WHEREAS SIMILAR PROVISION EXISTS IN SECTION 43CA OF THE ACT I.E. WHEN AN IMMOVABLE PROPERTY IS SOLD AS A STOCK - IN - TRADE. IT IS PROPOSED TO AMEND THE PROVISIONS OF SECTION 50C SO AS TO PROVIDE THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROPERTY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DUTY VALUE ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURPOS ES OF COMPUTING THE FULL VALUE OF CONSIDERATION. IT IS FURTHER PROPOSED TO PROVIDE THAT THIS PROVISION SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION REFERRED TO THEREIN, OR A PART THEREOF, HAS BEEN PAID BY WAY OF AN ACCOUNT PAYEE CHEQUE OR A CCOUNT PAYEE BANK DRAFT OR USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY. 30 THESE AMENDMENTS ARE PROPOSED TO BE MADE EFFECTIVE FROM THE 1ST DAY OF APRIL, 2017 A ND SHALL ACCORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2017 - 18 AND SUBSEQUENT YEARS.' 17. IF WE TAKE ALL THESE ASPECTS IN THEIR SETTINGS AS A WHOLE, THEN IT WOULD INDICATE THAT EARLIER WHENEVER AN ASSESSEE DISPUTED ADOPTION OF SALE EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY IS PAID, THEN REFERENCE TO THE DVO IS MADE UNDER SECTION 50C(2). NORM ALLY, AS OBSERVED EARLIER, WHEN A SALE AGREEMENT WAS EXECUTED, PAYMENT WAS RECEIVED IN PART PERFORMANCE OF THE AGREEMENT, THEN VENDOR WOULD NOT GET ANYTHING MORE THAN THE AMOUNT AGREED IN THE SALE AGREEMENT. THERE MAY BE A TIME GAP BETWEEN EXECUTION OF AGR EEMENT TO SELL AND EXECUTION OF SALE DEED. IN BETWEEN IF CIRCLE RATE IS BEING ENHANCED, THEN HE WOULD LIKE TO CHALLENGE ADOPTION OF HIGHER SALE VALUE ON THE STRENGTH OF SALE AGREEMENT. IN THAT SITUATION, UNNECESSARY ENERGY WOULD BE DEVOTED IN ASCERTAINING FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF SALE. THE 21 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY ENCUMBRANCE ON THE PROPERTY BY VIRTUE OF SALE AGREEMENT WOULD ALSO GO AND THE DVO TO DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF SALE AT A LESSER AMOUNT THAN THE VALUE ADOPTED F OR THE PURPOSE OF PAYMENT OF STAMP DUTY. WE HAVE ALREADY MADE A REFERENCE TO SPECIFIC RELIEF ACT AND HOW A VENDOR OR VENDEE COULD ENFORCE THE SALE AGREEMENT UNDER SPECIFIC RELIEF ACT. UNDER SUCH ENFORCEMENT, THEY WOULD SETTLE THEIR RIGHT ON THE BASIS OF AG REED TERMS IN THE SALE AGREEMENT. THIS PROVISO WOULD ONLY SIMPLIFY THIS EXERCISE I.E. INSTEAD REMITTING THE MATTER TO THE DVO UNDER SECTION 50C(2), HE WOULD CONDUCT AN INQUIRY AS TO WHAT COULD BE VALUE OF THE PROPERTY ON THE DATE OF EXECUTION OF THE AGREEM ENT, AND WHETHER SUCH AGREEMENT HAS CREATED ANY ENCUMBRANCE OR NOT. THERE COULD BE A DIFFERENCE IN THE ACTUAL SALE CONSIDERATION THAN THE AMOUNT ON WHICH STAMP DUTY WAS PAID. THIS PROVISO HAS SIMPLIFIED THIS THING. IT CONTEMPLATES THAT STAMP DUTY VALUATIO N OF THE PROPERTY FOR THE PURPOSE OF STAMP DUTY PAYMENT ON THE DATE OF AGREEMENT CAN BE DEEMED AS FULL CONSIDERATION OF THE CAPITAL ASSET. THUS, IN THIS WAY, THE PROVISO CAN BE CONSTRUED AS CLARIFICATORY IN NATURE, AND CAN BE APPLIED ON PENDING MATTERS AS ALREADY HELD BY THE ITAT IN THE CASE OF DHARAMSHIBHAI SONANI(SUPRA). 18. IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAS CONTENDED THAT CONSIDERATION OF RS.3,00,11,000/ - IS MORE THAN THE VALUATION FOR THE PURPOSE OF STAMP DUTY AS ON 8.2.2010. NOWHERE T HE ASSESSEE HAS POINTED OUT SPECIFIC RATE ON THE DATE OF AGREEMENT. THEREFORE, WE ALLOW THESE TWO GROUNDS OF APPEAL FOR THE STATISTICAL PURPOSE. WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO. THE LD.AO SHALL CALL FOR CIRCLE RATE FOR THE PURPOSE OF STAMP D UTY VALUATION OF THIS PROPERTY AS ON 8.2.2010. HE SHALL DETERMINE THE SALE VALUE OF THE PROPERTY ON THE BASIS OF CIRCLE RATE APPLICABLE ON THIS PROPERTY ON 8.2.2010, AND THEREAFTER COMPUTE LONG TERM CAPITAL GAIN ASSESSABLE IN THE ASSESSMENT YEAR 2013 - 14. I N OTHER WORDS, TRANSFER OF THIS PROPERTY WOULD BE CONSTRUED ON 5.6.2012, BUT THE FULL VALUE OF CONSIDERATION IS TO BE EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAYABLE ON 8.2.2010. 11 . IN THE CASE OF M/S. LAHIRI PROMOTERS (SUPRA), THE ITAT, VISAKH APATNAM BENCH BY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SHRI K.P. VARGHESE VS. ITO (131 ITR 597) HAS HELD AS UNDER: - 12. THUS, BY EXECUTING THE SALE DEED IN JUNE, 2005, THE ASSESSEE HAS ONLY COMPLETED THE CONTRACTUAL OBLIGATIO N IMPOSED UPON IT BY VIRTUE OF THE SALE AGREEMENT. SINCE THE PROCESS OF SALE HAS BEEN INITIATED FROM THE DATE OF SALE AGREEMENTS, IN OUR OPINION, THE CHARACTER OF THE TRANSACTION VIS - A - VIS INCOME TAX ACT SHOULD BE DETERMINED ON THE BASIS OF THE CONDITIONS THAT PREVAILED ON THE DATE THE TRANSACTION WAS INITIALLY ENTERED INTO. ACCORDINGLY, THE APPLICABILITY OF THE PROVISIONS OF SECTION 50C SHOULD BE LOOKED AT ONLY ON THE DATE OF SALE AGREEMENT. THE ASSESSEE HAS FILED A CERTIFICATE OBTAINED FROM THE JOINT S UB - REGISTRAR, VISAKHAPATNAM, REGARDING MARKET VALUE OF THE IMPUGNED 22 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY PROPERTY AS ON THE DATE OF THE SALE AGREEMENTS. THE SAID CERTIFICATE WAS NOT PRODUCED BEFORE THE TAX AUTHORITIES. WE HAVE ALREADY HELD THAT THE PROVISIONS OF SECTION 50C SHOULD BE APPLIE D TO 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 WIT H 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. 12. THE COORDINATE BENCH OF THE VISAKHAPATNAM TRIBUNAL IN THE CASE OF SMT. CHALASANI NAGA RATNA KUMARI (SUPRA) HAS CONSIDERED THE SAME ISSUE AND HELD AS UNDER: - 13. IN THE PRESENT CASE, ON PERUSAL OF THE FACTS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS ENTERED INTO A SALE AGREEMENT IN THE YE AR 2007 AND AS ON THAT DATE, THE STAMP DUTY VALUE OF THE PROPERTY WAS LESS THAN SALE CONSIDERATION AGREED TO BE PAID BETWEEN THE PARTIES. ALTHOUGH, STAMP DUTY VALUE OF THE PROPERTY HAS BEEN CHANGED AS ON THE DATE OF SALE DEED, FOR THE PURPOSE OF DETERMINA TION OF DEEMED CONSIDERATION U/S 50C OF THE ACT, STAMP DUTY VALUE OF THE PROPERTY AS ON THE DATE OF EXECUTION OF AGREEMENT TO SALE SHOULD BE ADOPTED, INSTEAD OF VALUE ON THE DATE OF EXECUTION OF SALE DEED. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. WAS E RRED IN ADOPTING VALUE OF THE PROPERTY AS ON THE DATE OF SALE DEED TO DETERMINE DEEMED CONSIDERATION U/S 50C OF THE ACT. HENCE, WE DIRECT THE A.O. TO ADOPT VALUE OF THE PROPERTY AS ON THE DATE OF AGREEMENT TO SALE FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN U/S 50C OF THE ACT. 13. WE FIND THAT TO DECIDE THIS APPEAL WE NEED TO QUOTE THE RELEVANT PORTION OF SECTION 50C, WHICH READS AS UNDER: - 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE 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 (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DU TY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERAT ION 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 CAPITA L 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: 23 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY 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, ON OR BEFORE THE DATE O F THE AGREEMENT FOR TRANSFER.] FOLLOWING THIRD PROVISO SHALL BE INSERTED AFTER THE SECOND PROVISO TO SUB - SECTION (1) OF SECTION 50C BY THE FINANCE ACT, 2018, W.E.F. 1 - 4 - 2019 : FROM THE READING OF THE ABOVE, IT IS CLEAR THAT THE DATE OF AGREEMENT OF SALE AND THE DATE OF EXECUTION OF SALE DEED IS DIFFERENT, WHERE THE AMOUNT OF CONSIDERATION OR PART THEREOF HAS BEEN RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFOR E THE DATE OF THE AGREEMENT FOR TRANSFER, THE DATE OF AGREEMENT HAS TO BE CONSIDERED FOR THE PURPOSE OF SECTION 50C. IN THE PRESENT CASE, THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 80.00 LAKHS THROUGH BANKING CHANNELS ON 14/07/2010 I.E BEFORE THE DATE OF AGREEMENT. THEREFORE, IN OUR OPINION, PROVISO TO SECTION 50C HAS BEEN FULFILLED BY THE ASSESSEE THEREFORE PROVISO TO SECTION 50C APPLIES TO THE ASSESSEES CASE. THE ITAT, AHMADABAD B' BENCH IN THE CASE OF RAHUL G. PATEL (SUPRA) HAS CONSIDERED THE SAME ISSUE AND HELD THAT THE PROVISO TO SECTION 50C INSERTED BY THE FINANCE ACT, 2016 W.E.F. 01/04/2017 IS CURATIVE IN NATURE, THEREFORE IT OPERATES RETROSPECTIVELY. THE COORDINATE BENCH OF THE VISAKHAPATNAM TRIBUNAL IN THE CASE OF SMT. CHALASANI NAGA RATNA KUM ARI (SUPRA) HAS ALSO CONSIDERED THE ISSUE TO DETERMINE THE DEEMED CONSIDERATION AS PER SECTION50C, THE DATE OF AGREEMENT HAS TO BE CONSIDERED NOT DATE OF SALE. NO MATERIAL HAS BEEN BROUGHT TO OUR NOTICE TO SHOW THAT THE ABOVE SAID ORDER HAS BEEN MODIFIED O R REVERSED BY THE HON'BLE HIGH COURT. FURTHER, LD. DEPARTMENTAL REPRESENTATIVE COULD POINT OUT ANY CONTRARY DECISION. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ABOVE REFERRED TO CASE, THIS GROUND OF APPEA L RAISED BY THE ASSESSEE IS ALLOWED. HONBLE A.P IN THE CASE OF POTLA NAGESWARA RAO(2014)365 ITR 0249 ALSO HELD AS UNDER: THE ELEMENT OF FACTUAL POSSESSION AND AGREEMENT ARE CONTEMPLATED AS TRANSFER WITHIN THE MEANING OF THE AFORESAID SECTION. WHEN THE T RANSFER IS COMPLETE, AUTOMATICALLY, CONSIDERATION MENTIONED IN THE AGREEMENT FOR SALE HAS TO BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF ASSESSMENT OF INCOME FOR THE ASSESSMENT YEAR WHEN THE AGREEMENT WAS ENTERED INTO AND POSSESSION WAS GIVEN. 7.2 . IN THE INSTANT CASE BOTH TRANSACTIONS OF AGREEMENT AND POSSESSION 24 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY WAS HANDED OVER ON 16.1 1 .2010 AND THE PART PAYMENT WAS ALSO RECEIVED BY THE ASSESSEE ON 16.11.2010.THEREFORE RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THIS TRIBUNAL IN THE CASE OF APPANA HARI NAGA VENKAT RAO SUPRA WE HOLD THAT MARKET VALUE DETERMINED BY THE SRO FOR RE GISTERING THE DOCUMENT AS ON 16. 1 1. 2010 HAS TO BE CONSIDERED AS THE FULL VALUE OF CONSIDERATION BUT NOT THE VALUE DETERMINED IN THE SALE DEED. 8. EVEN OTHERWISE FROM CAREFUL VER IFICATION OF THE PROCEEDINGS OF THE DISTRICT REGISTRAR, THE MARKET RATE AS ON THE DATE OF EXECUTION OR THE SALE DEED WAS RS.26,000/ - I.E. ON 28.02.2011, BUT NOT AS ON16.11.2010 SINCE THERE WAS SUBSTANTIAL TIME GAP BETWEEN THE SALE AGREEMENT AND THE SALE D EED, THERE IS A POSSIBILITY OF INCREASE IN THE MARKET RATE. IN THE INSTANT CASE, THE ASSESSEE HA D OBTAINED THE MARKET VALUE CERTIFICATE AS ON 16.11.2010 FROM THE JOINT SUB REGISTRAR VIDE CERTIFICATE DATED 27.05.2015 FOR THE SAME DOOR NO.2 - 4 - 34 AND IT WA S RS.16,000/ - PER SQ.YARD AS ON 16.11.2010. SUBSEQUENT TO THE EXECUTION OF THE SALE DOCUMENT ALSO THE ASSESSEE HAS OBTAINED THE GUIDELINE VALUE FOR THE SAME MUNICIPAL NUMBER OF 2 - 4 - 34 AND THE MARKET VALUE AS ON 18.04.2011 WAS AT RS.12,000/ - PER SQ.YARD. THE DISTRICT REGISTRAR FIXED THE MARKET RATE AT RS.26,000/ - AS AGAINST THE GUIDE LINE VALUE OF RS.12,000/ - OR RS.16,000/ - AS PER THEIR OWN 25 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY RECORDS WITHOUT GIVING REASON FOR DEVIATING THE SRO VALUE OR THE MARKET VALUE FIXED AS ON 16.11.2010 AS AGREED BY B OTH THE PARTIES. ON 08.06.2017 ALSO, THE ASSESSEE HAS OBTAINED THE MARKET VALUE CERTIFICATE FROM JOINT SUB REGISTRAR, REGISTRATION AND STAMPS DEPARTMENT OF GOVT. OF ANDHRA PRADESH WHICH WAS CERTIFIED THAT THE VALUE OF THE VACANT LAND AT DO O R NO.2 - 4 - 34 WAS RS.12,000/ - AS ON 28.02.2011. THE LD.AO BRUSHED ASIDE THE EVIDENCE PRODUCED BY THE ASSESSE E FOR IRRELEVANT DIFFERENCES IN THE CERTIFICATE SUCH AS CHANGE OF LOCALITY ETC. THE AO OUGHT TO HAVE CONSIDERED THAT EVEN THOUGH THERE MAY BE MULTIPLE NAMES FOR THE SAME LOCALITY OR STREET , DOOR NO I S UNIQUE AND REMAINS THE SAME FOR EACH HOUSE IN A TOWN OR MUNICIPALITY. SUBSEQUENT TO THE SALE OF THE LAND ALSO, THE JOINT SUB REGISTRAR HAS GIVEN THE MARKET VALUE OF THE PROPERTY AT RS.12,000/ - PER SQ.YD AS DISCUSSED ABOV E. 9. CONSIDERING ALL THE ABOVE FACTS, WE HOLD THAT FOR THE PURPOSE OF CAPITAL GAINS, THE FULL VALUE OF CONSIDERATION HAS TO BE TAKEN AS DETERMINED BY STAMPS AND REGISTRATION AUTHORITY AS ON 16.11.2010, THE DATE OF SALE AGREEMENT. SINCE, WE HAVE ALREADY TAKEN VIEW THAT THE MARKET VALUE AS ON SALE AGREEMENT HAS TO BE CONSIDERED FOR THE PURPOSE OF CAPITAL GAINS W E ARE NOT INCLINED TO COMMENT ON THE ISSUE OF MARKET VALUE DETERMINED BY THE DISTRICT REGISTRAR, SINCE THE SAME IS PENDING IN THE COURT. 26 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY 10. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO AND DIRECT THE AO TO COMPUTE THE CAPITAL GAINS AS PER THE STAMP VALUE ASSESSED IN THE SALE AGREEMENT CUM POSSESSION DATED 16.1 1 .201 0 . 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND STAY APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JUNE 2019. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 19 .0 6 .2019 L.RAMA, SPS 27 S.A.NO.49/VIZ/2019 AND I.T.A . NO .234/VIZ/2019 M/S URVASI ENTERPRISES, RAJAHMUNDRY / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - M/S URVASI ENTERPRISES , D.NO.34 - 1 - 2, MANGALAVARAPUPETA, RAJAHMUNDRY, EAST GODAVARI DIST. 2. / THE REVENUE INCOME TAX OFFICER, WARD - 1, RAJAHMUNDRY 3. THE PR. COMMISSIONER OF INCOME TAX , RAJAMAHENDRAVARAM 4. THE COMMISSIONER OF TAX (APPEALS), RAJAMAHENDRAVARAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM