Trincas Vinimay (P) Ltd., Kolkata V. I.T.O.,Ward-4(1), Kolkata

ITA 316/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1121 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 16-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAUL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Capital Gains
• Section: 50C; 14A; 115JB

Judgement Text

ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT & SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 316/KOL/2020 ASSESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED,....................... ................................ APPELLANT C/O. SUBASHAGARWAL & ASSOCIATES, ADVOCATES, SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213, 2 ND FLOOR, KOLKATA-700069 [PAN:AACCT3639H] -VS.- INCOME TAX OFFICER,................................ .................................... RESPONDENT WARD-4(1), KOLKATA AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, APPEARED ON BEHALF O F THE ASSESSEE SHRI SUPRIYO PAUL, SR. D.R. , APPEARED ON BEHALF OF THE REVENUE DATE OF CONCLUDING THE HEARING : OCTOBER 27, 2020 DATE OF PRONOUNCING THE ORDER : DECEMBER 18, 2020 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-12 KOLKATA DAT ED 09.10.2018 . 2. THE ISSUE RAISED IN GROUND NO. 1 OF THIS APPEAL RELATES TO THE ADDITION OF RS.34,75,731/- MADE BY THE ASSESSING OF FICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON ACCOUNT OF DEEMED CAPITA L GAINS BY INVOKING THE PROVISIONS OF SECTION 50D OF THE INCOME TAX ACT , 1961. ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 2 3. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF INVESTMENT IN SECURITIES, LENDING A ND SALE OF PROPERTY. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY IT ON 30.01.2014 DECLARING TOTAL INCOME OF RS.18,31,130/- AS DETERMINED BY THE ASSESSING OFFICER. THE ASSESEE-COMPANY BY VIRTUE OF TWO AGREEMENTS DATED 25.12.2011 WITH THE BUILDER WAS ALLOTTED TWO FLATS BEARING NO. 1101 AND 1201 IN ORANGE COUNTY PROJECT AT GHAZIABAD. THE POSSESSION OF THE SAID FLATS WAS TO BE HANDED OVER BY THE BUILDER TO THE ASSESSEE-COMPANY IN THE MONTH OF APRIL/MAY, 2012. JUST BEFORE THE DA TE OF HANDOVER OVER THE POSSESSION, THE ASSESSEE-COMPANY TRANSFERRED TH E RIGHT TO PURCHASE THE SAID TWO FLATS TO MR. DEEPAK JAIN AND NR, DEEPA K MAHAJAN BY MEANS OF SELF-MADE AFFIFAVITS. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSEE-COMPANY FAILED TO FURNISH ANY AGREEMENT FO R THE SAID TRANSFER. THE ONLY DOCUMENT PRODUCED BY THE ASSESSEE IN THIS REGARD WAS SELF-MADE AFFIDAVITS, WHEREIN THE CONSIDERATION FOR TRANSFER OF FLATS WAS NOT MENTIONED. THE ASSESSEE-COMPANY, THEREFORE, WAS REQ UIRED BY THE ASSESSING OFFICER TO SHOW-CAUSE AS TO WHY THE CAPIT AL GAIN ARISING FROM THE SAID TRANSFER OF FLATS SHOULD NOT BE COMPUTED B Y INVOKING THE PROVISIONS OF SECTION 50D OF THE ACT. IN THIS REGAR D, IT WAS EXPLAINED ON BEHALF OF THE ASSESSEE-COMPANY THAT EVEN THOUGH ONL Y TERMS AND CONDITIONS OF TRANSFER WERE MENTIONED IN THE AFFIDA VITS WITHOUT ANY CONSIDERATION, THE FLATS WERE TRANFERED FOR A CONSI DERATION OF RS.52,85,185/- AND RS.48,59,000/- TO SHRI DEEPAK JA IN AND SHRI DEPAK MAHAJAN RESPECTIVELY. COPIES OF ACCOUNTS OF THE SAI D PARTIES WERE ALSO PRODUCED BY THE ASSESSEE TO SHOW THE SALE CONSIDERA TION AS AGREED BETWEEN THE PARTIES. IT WAS ALSO SUBMITTED ON BEHAL F OF THE ASSESESE- COMPANY THAT THE CAPITAL GAIN DULY COMPUTED BY TAKI NG INTO CONSIDERATION THE SALE CONSIDERATION WAS DECLARED IN THE RETURN O F INCOME FILED FOR THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSION MADE ON BEHALF OF THE ASSESESE-COMPANY. ACCORDING TO HIM, SINCE THE ONLY DOCUMENT EVIDENCING THE TRANSFER IN THE FORM OF SELF-MADE ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 3 AFFIDAVIT DID NOT INDICATE ANY CONSIDERATION FOR TR ANSFER, THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T RANSFER OF THE RIGHTS OF THE TWO FLATS WAS NOT ASCERTAINABLE AND COULD NOT B E DETERMINED. HE ACCORDINGLY INVOKED THE PROVISIONS OF SECTION 50D A ND BY ADOPTING THE FAIR MARKET VALUE OF THE SAID FLATS ON THE DATE OF TRANSFER AS ASCERTAINED FROM THE WEBSITE OF MAGIC BRICKS AT RS.79,94,457/ - AND RS.55,19,016/-, HE WORKED OUT THE CAPITAL GAIN ARISING FROM THE TRA NSFER OF TWO FLATS BY THE ASSESSEE AT RS.37,41,673/-. SINCE THE CAPITAL G AIN TO THE EXTENT OF RS.2,65,942/- WAS ALREADY OFFERED BY THE ASSESSEE T O TAX IN THE RETURN OF INCOME, THE BALANCE AMOUNT OF RS.34,75,731/- WAS AD DED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE ON ACCO UNT OF CAPITAL GAIN. 4. THE ADDITION OF RS.34,75,731/- MADE BY THE ASSES SING OFFICER ON ACCOUNT OF CAPITAL GAIN WAS CHALLENGED BY THE ASSES SEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) AND THE FOLLOWING SUBMI SSION WAS MADE ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS) IN SUPPORT OF ITS CASE ON THIS ISSUE:- THE PRIMARY BASIS FOR THE ADDITION MADE U/S. 50D O F THE INCOME-TAX ACT BY THE LD. A.O. PIVOTS ON HIS FALLAC IOUS INFERENCE THAT THE TRANSFER PRICE OF THE BOOKING RIGHTS IN TH E FLATS BY THE ASSESSEE COULD NOT BE ASCERTAINED EXCEPT ONLY BY ME ANS OF COPIES OF ACCOUNTS OF THE TRANSFEREE. IT IS OUR HUMBLE CON TENTION THAT APPLICATION OF S. 50D HAS BEEN WRONGLY INVOKED IN Y OUR ASSESSEE'S CASE. BUT BEFORE WE DELVE INTO THE ASPEC T OF NON- APPLICABILITY OF S. 50D OF THE ACT TO THE GIVEN FAC TS AND CIRCUMSTANCES IN THE ASSESSEE' CASE, IT IS VEHEMENT LY IMPORTANT TO CONTEMPLATE THE MEANING OF THE PROVISION UNDER S ECTION 50D WITH ITS INTENDED PURPOSE OF INSERTION VIDE THE FIN ANCE BILL, 2012. A BARE READING OF THE SECTION 50D, AS INSERTED WITH EFFECT FROM THE LS1 DAY OF APRIL, 2013, IS AS FOLLOWS- '50D. FAIR MARKET VALUE DEEMED TO BE FULL VALUE OF CONSIDERATION IN CERTAIN CASES.-WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF A CAPITAL ASSET BY A N ASSESSEE IS NOT ASCERTAINABLE OR CANNOT BE DETERMINED, THEN, FOR TH E PURPOSE OF COMPUTING INCOME CHARGEABLE TO TAX AS CAPITAL GAINS , THE FAIR MARKET VALUE OF THE SAID ASSET -ON THE DATE-OF TRAN SFER SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RE CEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. '. ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 4 AS PER THE FINANCE BILL OF 2012, RELATING TO DIRECT TAXES SEEKING TO AMEND THE INCOME-TAX ACT, THE FOLLOWING INSERTIO N WAS PROPOSED (PERTAINING TO SECTION 50D); EXTRACT FROM THE MEMORANDUM EXPLAINING THE PROVISIO N (S_ 50D) IN THE FINANCE BILL, 2012: 'FAIR MARKET VALUE TO BE FULL VALUE OF CONSLDERATIO N IN CERTAIN CASES CAPITAL GAINS ARE CALCULATED ON TRANSFER OF A CAPIT AL ASSET, AS SALE CONSIDERATION MINUS COST OF ACQUISITION. IN SO ME RECENT RULINGS, IT HAS BEEN HELD THAT WHERE THE CONSIDERAT ION IN RESPECT OF TRANSFER OF AN ASSET IS NOT DETERMINABLE UNDER T HE EXISTING PROVISIONS OF THE INCOME TAX ACT, THEN AS THE MACHI NERY PROVISION FAILS, THE GAINS ARISING FROM THE TRANSFER OF SUCH ASSETS IS NOT TAXABLE. IT IS, THEREFORE, PROPOSED THAT WHERE IN THE CASE O F A TRANSFER, CONSIDERATION FOR THE TRANSFER OF A CAPITAL ASSET(S ) IS NOT ATTRIBUTABLE OR DETERMINABLE THEN FOR PURPOSE OF CO MPUTING INCOME CHARGEABLE TO TAX AS GAINS, THE FAIR MARKET VALUE OF THE ASSET SHALL BE TAKEN TO BE THE FULL MARKET VALUE OF CONSIDERATION. ACCORDINGLY, IT IS PROPOSED TO INSERT A NEW PROVISI ON (SECTION 50D) IN THE INCOME-TAX ACT TO PROVIDE THAT FAIR MAR KET VALUE OF THE ASSET SHALL BE DEEMED TO BE THE FULL VALUE OF C ONSIDERATION IF ACTUAL CONSIDERATION IS NOT, ATTRIBUTABLE OR DETERM INABLE. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST DAY OF APR IL, 2013 AND WILL ACCORDINGLY APPLY TO ASSESSMENT YEAR 2013- 14 AND SUBSEQUENT ASSESSMENT YEARS, [CLAUSE 17}' FROM A BARE READING OF THE PROVISION AND THE MEMORA NDUM OF THE FINANCE BILL, 2012, EXPLAINING THE INSERTION OF THE NEW PROVISION (S. 50D), IT IS AMPLY CLEAR THAT FOR ITS APPLICABILITY THERE HAS TO BE A FACT SITUATION WHERE THE CONSIDER ATION 'IS NOT ASCERTAINABLE OR CANNOT BE DETERMINED', THUS, ITS A PPLICABILITY AND ANY SUBSEQUENT ADDITION UNDER THIS PROVISION CA NNOT BE ACCOMMODATED BY THE REVENUE DEPARTMENT IN A CASE WH ERE THE QUANTUM OF CONSIDERATION IS ASCERTAINABLE OR CAN BE DETERMINED. NOW, BUILDING OUR SUBMISSIONS ON THE PROPOUNDED PRE MISE OF S. 50D OF THE ACT, WE OUGHT TO ANALYZE WHETHER THE CON SIDERATION OF THE TWO FLATS WAS NOT ASCERTAINABLE OR COULD NOT BE DETERMINED IN THE ASSESSEE'S CASE. IT IS HUMBLY SUBMITTED THAT THE VALUE OF THE TWO FLATS (RESIDENTIAL FLAT BEARING NO. 1201 AN D NO. 1101 IN BLOCK NO. DC - 4 AND 11, RESPECTIVELY, SITUATED IN THE RESIDENTIAL COMPLEX WAS AT A MATTER OF FACT, DETERMINABLE FRO9M THE PAGE ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 5 NO. 2 OF THE ASSESSMENT ORDER ITSELF WHEREIN THE CO NSIDERATION VALUE WAS SPECIFICALLY MENTIONED AS UNDER: FLAT NO. TRANSFERRED TO CONSIDERATION VALUE AS AVAILABLE FROM THE COPY OF ACCOUNTS WITH THE PARTY AND DATE OF TRANSFER 1201 MR. DEEPAK JAIN S/O MR. R,C. JAIN RESIDENT OF 36, GF SURYANIKETAN, DELHI- 110092 RS.52,85,185/- BY VIRTUE OF AFFIDAVIT DATED 11.04.2012 OF DEEPTAK JAIN AND TRANSFER AFFIDAVIT TO BUILDERS ON 11,04.2012 1101 MR. DEEPAK MAHAJAN, S/O MR. SUDESH KR. MAHAJAN, RESIDENT OF B-22, SITA SHREE APTT., SECTGOR-14, ROHINI, DELI-110085 RS.48,59,000/- (BY VIRTUE OF AFFIDAVIT DT. 20.05.12 OF DEEPAK MAHAJAN AND TRANSFER AFFIDAVIT TO BUILDERS ON 20.05.12. IT IS FURTHER SUBMITTED THAT THE ASSESSEE RECEIVED TOTAL CONSIDERATION AMOUNT OF RS.1,01,44,185/- (RS.52,85, 185/- + RS.48,59,000/-J AGAINST TRANSFER RIGHTS AND CLAIMED SHORT TERM CAPITAL GAINS TO THE TUNE OF RS.2,65, 942/- AFTER D EDUCTING THE AMOUNT OJR-;98, 78,243/- (RS.S7,20,789/- + RS.41,S8 ,374/- PAID FOR BOOKING OF FLATS (EXTRACT OF I. T RETURN FOR TH E RELEVANT YEAR HEREWITH AND MARKED AS ANNEXURE: 'B'). IT IS IMPORT ANT TO EMPHASIZE AT THIS JUNCTURE THAT THE LD. AO. HAS MAD E A SELF- CONTRADICTORY OBSERVATION IN HIS ORDER WHEREIN ON P AGE - 2 HE MENTIONS: 'DURING THE COURSE OF HEARING, THE AR. OF THE ASSES SEE COMPANY PRODUCED THE BOOKS OF ACCOUNTS ALONG WITH OTHER REQ UISITE DETAILS WHICH HAVE ALSO BEEN PERUSED AND VERIFIED O N TEST CHECK BASIS. HE ALSO FURNISHED OTHER DETAILS/ DOCUMENT' W HICH HAVE ALSO BEEN PERUSED AND EXAMINED. IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOT ICED THAT THE ASSESSEE COMPANY HAD APPLIED FOR ALLOTMENT OF TWO F LATS TO THE DEVELOPERS (ABA BUILDERS LTD.) IN 'ORANGE COUNTY PR OJECT' AT GH-4, AHINSA KHAND-L, INDIRAPURAM, GHAZIABAD - 2010 14. BY VIRTUE OF TWO AGREEMENTS DATED 25/12/2011 WITH THE BUILDERS, TWO FLATS WERE ALLOTTED BEARING NOS. 1201 & 1101. D ETAILS OF FLAT & AMOUNT PAID ARE AS FOLLOWS ... ' WHEREAS ON PAGE - 3 OF THE ASSESSMENT ORDER HE SAYS : 'IN THE COURSE OF HEARING, THE ASSESSEE COMPANY WAS ASKED AS TO WHY THE FAIR MARKET VALUE OF THE TWO FLATS SHOULD N OT BE TAKEN FOR COMPUTATION OF CAPITAL GAIN BY VIRTUE OF SECTIO N 50D, WHEN THE RIGHT TO TRANSFER FLAT BEING AN IMMOVABLE PROPE RTY HAS BEEN TRANSFERRED WITHOUT ANY AGREEMENT/REGISTRATION. THE ASSESSEE COMPANY FILED ONLY TWO COPIES OF ACCOUNTS ONE WITH MR. DEEPAK JAIN OR SALE OF FLAT NO. 1201 AND THE OTHER WITH MR . DEEPAK ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 6 MAHAJAN FOR FLAT NO. 1101 TO SUBSTANTIATE THE TRANS FER OF FLAT & AMOUNT OF CONSIDERATION FOR TRANSFER OF FLATS. AFFI DAVIT WOULD SHOW ON THE TERMS & CONDITIONS OF TRANSFER M, WITHO UT ANY CONSIDERATION. SO, THE TRANSFER PRICE CAN'T BE ASCE RTAINED ONLY BY MEANS OF COPIES OF ACCOUNTS WITH THE TRANSFEREE.' THUS, HIS ADVERSE INFERENCE THAT THE TRANSFER PRICE COULD NOT BE ASCERTAINED FOR THE TWO FLATS BASED ON THE AFFIDAVI TS AND THAT THE RIGHT TO TRANSFER THE FLAT HAD BEEN TRANSFERRED WIT HOUT ANY AGREEMENT/ REGISTRATION IS IN CONTRADICTION TO THIS EARLIER OBSERVATION IN THE ASSESSMENT ORDER ITSELF WHEREIN HE ACKNOWLEDGES RECEIVING AND SCRUTINIZING BOOKS OF AC COUNTS AND OTHER DETAILS. THE RESPECTIVE AFFIDAVITS AND TRANSF ER ENDORSEMENTS WERE DILIGENTLY PRODUCED BEFORE THE AO . BY SIMPLY GOING THROUGH THE BANK STATEMENTS, THE CONSIDERATIO N RECEIVED FOR THE SALE OF THE RIGHTS IN THE TWO FLATS (UNDER CONSTRUCTION) IS VERIFIABLY ASCERTAINABLE. AS A MATTER OF FACT, THE ASSESSEE COMPANY HAS ALSO DISCLOSED IN ITS ITR THE SHORT TER M CAPITAL GAINS ARISING FROM THE TRANSFER OF THE RIGHTS IN TH E TWO FLATS, WHICH COULD OTHERWISE WOULD NOT HAVE BEEN POSSIBLE TO COMPUTE LEST THE CONSIDERATION WAS ASCERTAINABLE. INEXORABL Y, WE EMPHATICALLY ASSERT BEFORE YOUR HONOUR THAT THE COP IES OF THE FLAT BUYER AGREEMENTS ALONG WITH THE TRANSFER DOCUM ENTS VIZ. AFFIDAVITS AND TRANSFER ENDORSEMENTS HAD BEEN DULY SUBMITTED BEFORE THE LD. AO. AND SCRUTINIZED BY HIM AS IS AMP LY EVIDENT FROM HIS ORDER. THE JURISDICTION AND APPLICABILITY OF S. 50D IS CLEARLY OUSTED AND HENCE, HAS BEEN WRONGLY INVOKED BY THE LD. AO. AS FAR AS THE APPLICABILITY OF S. 50C IS CONCERNED, IT IS HUMBLY STATED THAT NUMEROUS JUDGMENTS HAVE CLARIFIED THE P OSITION OF LAW SO FAR AS THE TRANSFER OF RIGHTS IN A FLAT IS C ONCERNED. THE ITAT 'B' BENCH OF AHMEDABAD TRIBUNAL IN ITA NO.2519/AHD/2009 ORDER DATED 13.04.2012 IN THE CASE OF INCOME TAX OFFICER VS. SILRI YASIN MOOSA GODIL, -UNDER SIM ILAR FACTS AND CIRCUMSTANCES AT PARA-16 HELD AS FOLLOWS: - '16. FROM THE READRNG OF SEC. SOC, IT IS EVIDENT TH AT SEC. 50C IS A DEEMING PROVISION AND IT EXTENDS TO ONLY TO LAND OR BUILDING OR BOTH. SECTION 50C CAN COME INTO PLAY ONLY M A SITUA TION WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN APPELLANT OF A CAPITAL ASSET, BEING LAND OR B OTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF STATE GOVERNMENT THEREFORE FOR THE PURPOSE OF PAYME NT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER IT IS SETTLED LEG 1 PROPOSITION THAT DEEMING PROVISION CAN BE APPLIED ONLY IN RESPE CT OF THE SITUATION SPECIFICALLY GIVEN AND HENCE CANNOT GO BE YOND THE EXPLICIT MANDATE OF THE SECTION. CLEARLY THEREFORE, IT IS ESSENTIAL THAT FOR APPLICATION OF SEC. 50C THAT THE TRANSFER MUST BE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH. IF T HE CAPITAL ASSET UNDER TRANSFER CANNOT BE DESCRIBED AS 'LAND OR BUIL DING OR BOTH' THEN SECTION 50C WILL CEASE TO APPLY. FROM THE FACT S OF THE CASE ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 7 NARRATED ABOVE, IT IS SEEN THAT THE ASSESSEE HAS TR ANSFERRED BOOKING RIGHTS AND RECEIVED BACK THE BOOKING ADVANC E. BOOKING ADVANCE CANNOT BE EQUATED WITH THE CAPITAL ASSET AN D THEREFORE SECTION 50C CANNOT BE INVOKED.' THIS VIEW WAS ALSO FOLLOWED BY THE HON'BLE KOLKATA BENCH OF THE ITA TIN M IS. BANIARA ENGS. PVT. LTD. V. LTO (ITA N O. 635/KO1/2018. SIMILARLY, IN OUR CASE AS WELL, THE A SSESSEE ACQUIRED CERTAIN RIGHTS TO PURCHASE THE SAID FLATS. BEFORE THE CONSTRUCTION OF THE TWO FLATS WERE COMPLETE, THE AS SESSEE SOLD HIS RIGHTS SO ACQUIRED TO PURCHASE THE FLATS BY NOMINAT ING THE ULTIMATE PURCHASERS FOR REGISTRATION OF THE SAID TW O FIATS AND ENDORSING THE TRANSFER. HENCE, THE JURISDICTION OF THE DEEMING SECTION 50C IS ALSO OUSTED. IN THE ASSESSMENT ORDER, THE LD. A.D. HAS OBSERVED (PAGE - 2, 2ND LAST PARA) THAT THE ASSESSEE COMPANY HAS TRANSFERRE D THE RIGHT TO PURCHASE THE TWO FLATS TO THE ULTIMATE BUYERS JUST BEFORE THE DATE OF HANDING OVER THE POSSESSION. THUS, IT IS AN UNCONTESTED FACT THAT THE POSSESSION WAS NEVER GIVEN TO THE ASS ESSEE COMPANY AND THUS, BY VIRTUE OF THE TRANSFER ENDORSEMENT, TH E ASSESSEE COMPANY HAS JUST BECOME A CONFIRMING PARTY. IN ITD V. MAILESIL KUMAR SINGILANIA HUF (ITA NO. 1387/KOL/2017 THE HON 'BLE LTAT KOLKATA BENCH HELD THAT S. 50C WAS NOT APPLICABLE T O THOSE SET OF FACTS BECAUSE TILE ASSESSEE HAD NOT TAKEN POSSESSIO N OF THE FLATS AND HAD NOMINATED TILE FINAL BUYERS IN ITS PLACE. T HUS, IN SITUATIONS WHERE BOOKING RIGHTS WERE SIMPLY TRANSFE RRED, IT CANNOT BE SAID THAT CAPITAL ASSET, BEING LAND OR BU ILDING OR BOTH HAVE BEEN TRANSFERRED AND HENCE, S. 50C CANNOT APPL Y. 5. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE S UBMISSIONS MADE ON BEHALF OF THE ASSESSEE-COMPANY ON THIS ISSUE AND PR OCEEDED TO CONFIRM THE ADDITION MADE ON ACCOUNT OF CAPITAL GAIN FOR TH E FOLLOWING REASONS GIVEN IN HIS IMPUGNED ORDER:- I HAVE CONSIDERED THE GROUNDS OF APPEAL, STATEMENT OF FACTS AND SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE APPELLATE COMPANY AS WELL AS THE ASSESSMENT ORDER F RAMED IN THE LIGHT OF THE MATERIALS AVAILABLE ON RECORD B EFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS . THE AO HAS ALREADY DISCUSSED THE ISSUE IN DETAIL WHILE PAS SING THE ORDER IN THE MATTER I AGREE WITH THE VIEW AS TAKEN BY THE AO IN THE MATTER. KEEPING IN VIEW OF THE FACTS AS M ENTIONED ABOVE, IN THE ABSENCE OF ANY COGENT MATERIAL EVIDEN CE, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ASSESSIN G OFFICER AND THE SAME IS HEREBY UPHELD. LN VIEW OF THE ABOVE , THIS GROUND OF APPAL IS DISMISSED. ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 8 6. THE LD. COUNSEL FOR THE ASSESSEE MAINLY REITERAT ED BEFORE US THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE BEFORE T HE LD. CIT(APPEALS) ON THIS ISSUE. HE SUBMITTED THAT EVEN THOUGH THE CO NSIDERATION FOR TRANSFER OF TWO FLATS IN QUESTION WAS NOT SPECIFICA LLY MENTIONED IN THE AFFIDAVITS FILED BY THE ASSEESEE-COMPANY, THE COPIE S OF ACCOUNT OF THE TRANSFEREES WERE FURNISHED BY THE ASSESSEE-COMPANY BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS SHOWING THE AGREED SALE CONSIDERAETION FOR FLAT NO. 1101 AND 1201 AT R S.49,59,000/- AND RS.52,85,185/- RESPECTIVELY. HE ALSO SUBMITTED THAT THE SALE CONSIDERATION SO AGREED BETWEEN THE ASSESESE-COMPAN Y AND THE TRANSFEREES FOR TRANSFER OF THE SAID TWO FLATS WAS TAKEN INTO CONSIDERATION BY THE ASSESESE-COMPANY FOR COMPUTING THE CAPITAL G AIN AND THE CAPITAL GAIN SO COMPUTED AT RS.2,65,942/- WAS DULY DECLARED BY THE ASSESSEE- COMPANY IN ITS RETURN OF INCOME. HE CONTENDED THAT THE CONSIDERATION FOR TRANSFER OF TWO FLATS AS AGREED BETWEEN THE ASSESSE E-COMPANY AND TRANSFEREES THUS WAS ASCERTAINABLE AND THE PROVISIO NS OF SECTION 50D OF THE ACT WERE NOT APPLICABLE. HE CONTENDED THAT THE ASSESSING OFFICER, THEREFORE, WAS NOT JUSTIFIED IN INVOKING THE SAID P ROVISIONS WITHOUT EVEN MAKING ANY ENQUIRY WHATSOEVER WITH THE TRANSFEREES TO ASCERTAIN THE FACTUAL POSITION REGARDING THE CONSIDERATION AGREED FOR TRANSFER OF TWO FLATS AS CLAIMED BY THE ASSESSEE. 7. THE LD. D.R., ON THE OTHER HAND, STRONGLY SUPPOR TED THE ORDERS PASSED BY THE AUTHORITIES BELOW ON THIS ISSUE. HE C ONTENDED THAT THE ONLY DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE EVIDENCI NG THE TRANSFER OF TWO FLATS WAS IN THE FORM OF SELF-MADE AFFIDAVIT AN D SINCE THE CONSIDERATION OF TRANSFER WAS NOT MENTIONED IN THE SAID AFFIDAVIT, THE AUTHORITIES BELOW WERE FULLY JUSTIFIED IN ARRIVING AT THE CONCLUSION THAT THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF THE TWO FLATS BY THE ASSESSEE WAS NOT ASCERTAINABLE AND INV OKING THE PROVISIONS OF SECTION 50D TO COMPUTE THE CAPITAL GAIN CHARGEABLE TO TAX BY ADOPTING THE ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 9 FAIR MARKET VALUE OF THE TWO FLATS ON THE DATE OF T RANSFER AS DEEMED CONSIDERATION RECEIVED OR ACCRUING TO THE ASSESESE AS A RESULT OF TRANSFER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT EVEN THOUGH THE CONSIDERATION FOR TRANSFER OF TWO FLATS RECEIVED OR ACCRUING TO THE ASSESSEE WAS NOT MENTIONED IN THE AFFIDAVIT FILED B Y THE ASSESSEE EVIDENCING THE SAID TRANSFER, COPIES OF ACCOUNTS OF THE CONCERNED TRANSFEREES WERE PRODUCED BY THE ASSESSEE TO SHOW T HE CONSIDERATION FOR TRANSFER OF THE TWO FLATS AS AGREED BETWEEN THE PAR TIES. WE, THEREFORE, DO NOT AGREE WITH THE CONTENTION OF THE REVENUE THAT T HERE WAS NO EVIDENCE PRODUCED BY THE ASSESSEE-COMPANY TO SHOW THE CONSID ERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE TWO FLA TS. AS MATTER OF FACT, THE SAID CONSIDERATION SO AGREED WAS TAKEN INTO CONSIDE RATION BY THE ASSESEE- COMPANY FOR COMPUTING THE CAPITAL GAIN ARISING FROM THE TRANSFER WHICH WAS DULY DECLARED IN ITS RETURN OF INCOME AND AS RI GHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THERE WAS NO JUSTIFIC ATION ON THE PART OF THE AUTHORITIES BELOW TO DOUBT OR DISPUTE THE SAID CONS IDERATION AS CLAIMED TO BE MUTUALLY AGREED BY THE ASSEEESE-COMPANY TO ARRIV E AT THE CONCLUSION THAT THE CONSIDERATION RECEIVED OR ACCRUING AS A RE SULT OF THE TRANSFER OF THE TWO FLATS WAS NOT ASCERTAINABLE OR COULD NOT BE DETERMINED WITHOUT EVEN MAKING ANY INQUIRY WHATSOEVER WITH THE CONCERN ED TRANSFEREES. KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES O F THE CASE, WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 50D ARE NOT APPLICABLE IN THIS CASE AND THE IMPUGNED ADDITION MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LD. CIT(APPEALS) BY INVOKING THE SAID PROVIS ION IS NOT SUSTAINABLE. WE ACCORDINGLY DELETE THE SAME AND ALLOW GROUND NO. 1 OF THE APPEAL. 9. AS REGARDS THE ISSUE RAISED IN GROUND NO. 2 REGA RDING THE DISALLOWANCE OF RS.80,717/- MADE BY THE ASSESSING O FFICER AND CONFIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 14A OF THE AC T, THE LIMITED RELIEF THAT IS SOUGHT BY THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE AMOUNT OF ITA NO. 316/KOL/2020 ASS ESSMENT YEAR: 2013-2014 TRINCAS VINIMAY (P) LIMITED 10 DISALLOWANCE SO MADE CANNOT BE ADDED WHILE COMPUTIN G THE BOOK PROFIT OF THE ASSESSEE-COMPANY UNDER SECTION 115JB OF THE AC T. SINCE THIS ISSUE IS SQUARELY COVERED BY THE VARIOUS JUDICIAL PRONOUNCEM ENTS INCLUDING THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE C ASE OF ACIT VS.- VIREET INVESTMENT (P) LIMITED 165 ITD 27 (SB) (DELHI), WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON ACCOUNT OF D ISALLOWANCE UNDER SECTION 14A WHILE COMPUTING THE BOOK PROFIT OF THE ASSESSEE-COMPANY UNDER SECTION 115JB OF THE ACT. GROUND NO. 2 OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 18, 2020. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT) KOLKATA, THE 18 TH DAY OF DECEMBER, 2020 COPIES TO : (1) TRINCAS VINIMAY (P) LIMITED, C/O. SUBASHAGARWAL & ASSOCIATES, ADVOCATES, SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213, 2 ND FLOOR, KOLKATA-700069 (2) INCOME TAX OFFICER, WARD-4(1), KOLKLATA AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-2. KOLKATA ; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.