1 ITA 290-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 290/JP/2011 ASSTT. YEAR : 2007-08. SHRI MAHESH CHAND SETHIA, VS. THE INCOME-TAX OFFI CER, A-210(A), I.P.I.A., ROAD NO. 6, WARD 1(2), KOTA. KOTA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.V. MAHESHWARI RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 17.10.2011 DATE OF PRONOUNCEMENT : 31.10.2011. ORDER DATE OF ORDER : 31/10/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS OBJECTING IN UPHOLDING THE ACTIO N OF THE AO CHARGING LONG TERM CAPITAL GAIN ON AMOUNT OF RS. 11,74,427/- TREATING IT AS PER SECTION 50C OF THE IT ACT. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS SH OWN SHORT TERM CAPITAL GAIN ON RS. 1,31,685/- ON SALE OF PLOT. THE SALE CONSIDERATION WAS DECLARED AT RS. 8,50,000/-. COST OF ACQUISITION WAS SHOWN AT RS. 5,51,600/- AND COST OF IMPROVEMENT WAS SHOWN AT RS. 1,92,380/-. THE AO OBSERVED THAT REGISTRATION AUTH ORITY HAS TAKEN THE VALUE OF THE PROPERTY AT RS. 11,74,427/- FOR STAMP DUTY PURPOSE. HE, THEREFORE, MADE AN ADDITION OF 2 RS. 3,24,427/- BY INVOKING PROVISIONS OF SECTION 50 C. IMPROVEMENT COST OF RS. 1,92,380/- WAS ALSO DISALLOWED BY THE AO. 4. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT ( A). AFTER CONSIDERING THE SUBMISSIONS, IMPROVEMENT COST WAS DELETED BY LD. CI T (A). HOWEVER, THE ADDITION OF RS. 3,24,427/- WAS SUSTAINED BY INVOKING PROVISIONS OF SECTION 50C. 5. NOW ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUN AL. 6. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL. W E NOTED THAT THE PLOT IN QUESTION WAS PURCHASED ON AGREEMENT VIDE AGREEMENT DATED 11.11.2 004 AT A VALUE OF RS. 5,51,000/- FROM ONE PRAKASH ISRANI AND THE SAME WAS SOLD ON AG REEMENT TO SMT. REKHA MAHESHWARI ON 28.9.2006 AT A PRICE OF RS. 8,50,000/- AFTER IMP ROVEMENT COST OF RS. 1,92,380/- AND THE RESULTANT GAIN OF RS. 1,06,020 WAS SHOWN BY THE ASS ESSEE. ON PURCHASE AND SALE THROUGH AN AGREEMENT, IN OUR VIEW, PROVISIONS OF SECTION 50 C ARE NOT APPLICABLE AS THE SALE DEED WAS NOT EXECUTED. ONLY SALE WAS MADE THROUGH AGREE MENT AND THE ORIGINAL PURCHASER GOT THE REGISTRY IN THE NAME OF THE BUYER FROM ASSESSEE DIRECTLY AND, THEREFORE, PROVISIONS OF SECTION 50C ARE NOT APPLICABLE. THE PROVISIONS OF SECTION 50C ARE AMENDED WITH EFFECT FROM 1.10.2009 WHICH IS APPLICABLE FOR ASSESSMENT Y EAR 2010-11 AND, THEREFORE, AMENDED PROVISION IS ALSO NOT APPLICABLE ON THE FACTS OF TH E PRESENT CASE. AS PER AMENDED PROVISIONS OF SECTION 50C IT HAS BEEN INSERTED THAT ASSESSABLE MEANS ON AGREEMENT ALSO THE VALUE WILL BE TAKEN AS PER VALUE ASSESSED BY TH E REGISTRAR. THIS AMENDED PROVISION IS NOT APPLICABLE BEFORE 1.10.2010 AND, THEREFORE, IN OUR VIEW THE AO WAS NOT JUSTIFIED IN INVOKING PROVISIONS OF SECTION 50C AS THE PURCHASE MADE BY ASSESSEE THROUGH AGREEMENT WAS NOT REGISTERED. IN VIEW OF THESE FACTS AND CIR CUMSTANCES, WE HOLD THAT LD. CIT (A) 3 WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A O. ACCORDINGLY WE DELETE THIS ADDITION AND DIRECT THE AO TO ACCEPT THE CAPITAL GAIN SHOWN BY ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 8. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31. 10.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SHRI MAHESH CHAND SETHIA, KOTA. THEITO WARD 1(2), KOTA. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 290/JP/2011) BY ORDER, AR ITAT JAIPUR.