Tejkumar Maruti Tupe, Pune V. Income-tax Officer, Ward - 14(2), Pune

ITA 525/PUN/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1456 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 23-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NANDITA KANCHAN
• Assessee Lawyers: HARI KRISHAN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Additional evidence; Cost of acquisition; Fair market value
• Section: 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JM . / ITA NO . 523 /P U N/201 8 / ASSESSMENT YEAR : 20 13 - 14 SHRI MARUTI PATILBUVA TUPE, SADESATRA NALLI, JIJAI BUNGLOW, HADAPSAR, PUNE 411028 PAN : ADAPT3099H ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 1 4(2), PUNE / RESPONDENT . / ITA NO .524/PUN/2018 / ASSESSMENT YEAR : 2013 - 14 SHRI GHANSHYAM MARUTI TUPE, SADESATRA NALLI, JIJAI BUNGLOW, HADAPSAR, PUNE 411028 PAN : ADAPT2980P ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 14(2), PUNE / RESPONDENT 2 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 . / ITA NO .525/PUN/2018 / ASSESSMENT YEAR : 2013 - 14 SHRI TEJKUMAR MARUTI TUPE, SADESATRA NALLI, JIJAI BUNGLOW, HADAPSAR, PUNE 411028 PAN : ADAPT2975L ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 14(2), PUNE / RESPONDENT ASSESSEE BY : S HRI HARI K RISHAN REVENUE BY : S MT. NANDITA KANCHAN / DATE OF HEARING : 31 - 10 - 201 8 / DATE OF PRONOUNCEMENT : 26 - 1 1 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH ESE THREE APPEALS BY THE THREE DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 7, PUNE FOR ASSESSMENT YEAR 2013 - 14 IN THEIR RESPECTIVE CASES. ALL THE THREE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 23 - 01 - 2018. SINCE, THE GROUNDS RAISED IN ALL THESE APPEALS ARE IDENTICAL AND ARE ARISING FROM SAME TRANSACTION, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE BEING DISPOSED OF VIDE THIS COMMON ORDER. 3 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 2. THE ASSESSEE IN ITA NO. 523/PUN/2018 HAS RAISED FOLLOWING GROUNDS/ADDITIONAL GROUNDS OF APPEAL : BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT RESPECTFULLY CRAVES LEAVE TO PREFER AN APPEAL AGAINST THE ORDER DATED 23 JANUARY 2018 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX, (APPEALS) - 7, PUNE (HEREINAFTER REFERRED TO AS 'THE LEARNED CIT(A)') UNDER SECTION 250 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') ON THE FOLLOWING GROUNDS WHICH ARE INDEPENDENT OF AND WITHOUT PREJUDICE TO ONE ANOTHER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW: GROUND NO 1: IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO AND CONSEQUENTLY THE LEARNED CIT (A) HAVE FAILED TO APPRECIATE THE APPELLANT'S SUBMISSION AND HAVE ERRED IN DISALLOWING THE APPELLANT'S CLAIM OF DEDUCTION U/S 54F OF THE ACT OF RS . 7,32,34,060. IN VIEW OF THE ABOVE GROUNDS AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE APPELL ANT PRAYS YOUR HONOURS TO SET ASIDE THE RELEVANT ASSESSMENT ORDER PASSED BY THE AO WHICH HAS BEEN SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT(A) AND ALLOW DEDUCTION U/S 54F OF ENTIRE AMOUNT OF RS . 7,32,34,060 AND PASS ANY OTHER ORDER WHICH YOUR HONOURS MAY DEEMED FIT IN THE INTEREST OF JUSTICE. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY, THE GROUND OF APPEAL ON OR BEFORE THE HEARING. ADDITIONAL GROUNDS OF APPEAL : 1. THE ASSESSING OFFICER HAS WRONGLY SUBSTITUTED THE STAMP DUTY VALUE OF RS .7,570/ - PER. SQ. MTS. FOR THE DEVELOPMENT RIGHTS OF LAND ON THE DATE OF REGISTRATION OF THE AGREEMENT, FOR THE CONSIDERATION STATED IN THE AGREEMENT, PURPORTEDLY BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT, WHICH ARE NOT APPLICABLE TO TRANSFER OF DEVELOPMENT RIGHTS AS HELD BY HON'BLE MUMBAI BENCH OF THE TRIBUNAL IN VOLTAS LTD. (2016) 74 TAXMANN.COM 99 (MUMBAI TRIB.). 2. THE ASSESSING OFFICER ON THE ONE HAND HAS APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT BUT ON THE OTHER HAND THE ASSESSING OFFICER HAS FAILED TO APPLY THE PROVISIONS OF FIRST AND SECOND PROVISOS BELOW SUB SECTION 1 OF SECTION 50(C) OF INCOME TAX ACT. ONCE THE ASSESSING OFFICER HAS APPLIED THE PROVISIONS OF SECTION 50C HE SHOULD HAVE ALSO APPLIED THE 1 ST AND 2 ND PROVISO BELOW SECTION 50C(1) OF THE ACT. 3. THE ASSESSING OFFICER SHOULD HAVE ACCEPTED THE CONSIDERATION OF RS.1,80,00,000/ - PER ACRE EQUAL TO RS .4,448/ - PER SQ. MTS. FOR GRANTING DEVELOPMENT RIGHTS OF THE LAND, AS STATED IN THE REGISTERED DEVELOPMENT AGREEMENT AS REQUIRED BY THE FIRST AND SECOND PROVISOS BELOW SECTION 50C(1) OF THE ACT. 4 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 3 . SHRI HARI KRISHAN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT SINCE THE FACTS IN ALL THE THREE CASES ARE IDENTICAL AND ISSUES INVOLVED ARE SAME THE CASE OF SHRI MARUTI PATILBUVA TUPE IN ITA NO. 523/PUN/2018 BE TAKEN AS A LEAD CASE AND HENCE, THE FACTS ARE NARRATED FROM THE SAID APPEAL. 3.1 THE LD. AR SUBMITTED THAT THE ASSESSEE ALONG WITH OTHER CO - OWNERS HAD ACQUIRED ANCESTRAL LAND COMPRISING IN SR. NO. 192/A/1A, 192/A/ 2A/1, 192A/3, 192A/2A/2, 192/A/2B, 192/A/1B, 193/1A, 193/1B AND 193/2/2 TOTAL ADMEASURING 10 ACRES I.E. 76,000 SQ. MTRS. IN VILLAGE SADE SATRA NALI, HADAPSAR, TALUKA - HAVELI, DISTT - PUNE. THE LD. AR SUBMITTED THAT THE LAND WAS INITIALLY OWNED BY SHRI PATILB UVA NAMDEO TUPE , HIS WIFE MRS. HOUSABAI PATILBUVA TUPE , HIS SON MARUTI PATILBUVA TUPE (THE PRESENT ASSESSEE), HIS DAUGHTER IN LAW LAXMIBAI MARUTI TUPE AND HIS GRANDSONS GHANASHYAM MARUTI TUPE (APPELLANT IN ITA NO. 524/PUN/2018), MILIND MARUTI TUPE AND TEJKUMAR MARUTI TUPE (APPELLANT IN ITA NO. 525/PUN/2018). AFTER THE DEMISE OF PATILBUVA NAMDEO TUPE AND HOUSABAI PATILBUVA TUPE THEIR SHARE IN LAND WAS INHERITED BY THE OTHER CO - OWNERS BEING SON, DAUGHTER - IN - LAW AND GRANDSONS. 3.2 THE LD. AR SUBMITTED THAT A NOTARIZED JOINT VENTURE AGREEMENT DATED 17 - 12 - 2005 WAS EXECUTED BY ALL THE CO - OWNERS OF THE LAND WITH M/S. CITY CORPORATION LTD. FOR DEVELOPMENT OF THE LAND INTO A TOWNSHIP. THE OWNERS OF THE LAND AGREED TO GRANT DEVELOPMENT RIGHTS IN THE AFORESAID LAND FOR MUTUALLY AGREED MINIMUM CONSIDERATION OF RS. 1.20 CRORES PER ACRE. IN ADDITION THE LAND OWNERS WERE ENTITLED TO RECEIVE 25% OF THE SALE PROCEEDS OF THE BUILT UP AREA OF UNITS TO BE CONSTRUCTED. AT THE TIME OF EXECUTION OF AGREEMENT THE LAND OWNE RS RECEIVED ADVANCES BY WAY OF CHEQUE FROM M/S. CITY CORPORATION LTD. AS FOLLOWING DETAILS : 5 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 1. PATILBUVA NAMDEO TUPE : RS.6,78,600/ - @RS.2,37,500/ - PER ACRE AT THE TIME OF SIGNING OF THIS AGREEMENT BY CHEQUE NO. 247001 DATED 15 - 12 - 2005. RS.4,07,160/ - @RS.1,42,500/ - PER ACRE BY CHEQUE NO. 247009 DATED 15 - 01 - 2006. 2. HOUSABAI PATILBUVA TUPE : RS.6,78,600/ - @RS.2,37,500/ - PER ACRE AT THE TIME OF SIGNING OF THIS AGREEMENT BY CHEQUE NO. 247002 DATED 15 - 12 - 2005. RS.4,07,160/ - @RS.1,42,500/ - PER ACRE BY CHE QUE NO. 2470 10 DATED 15 - 01 - 2006. 3. MARUTI PATILBUVA TUPE : RS.6,78,600/ - @R S .2,37,500/ - PER ACRE AT THE TIME OF SIGNING OF THIS AGREEMENT BY CHEQUE NO. 24700 3 DATED 15 - 12 - 2005. RS.4,07,160/ - @RS.1,42,500/ - PER ACRE BY CHEQUE NO. 2470 11 DATED 15 - 01 - 2006. 4. LAXMIBAI MARUTI TUPE : RS.6,78,600/ - @RS.2,37,500/ - PER ACRE AT THE TIME OF SIGNING OF THIS AGREEMENT BY CHEQUE NO. 247004 DATED 15 - 12 - 2005. RS.4,07,160/ - @RS.1,42,500/ - PER ACRE BY CHEQUE NO. 247012 DATED 15 - 01 - 2006. 6 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 5. GHANASHYAM MARUTI TUPE : RS.6 ,78,600/ - @RS.2,37,500/ - PER ACRE AT THE TIME OF SIGNING OF THIS AGREEMENT BY CHEQUE NO. 247005 DATED 15 - 12 - 2005. RS.4,07,160/ - @RS.1,42,500/ - PER ACRE BY CHEQUE NO. 247013 DATED 15 - 01 - 2006. 6. MILIND MARUTI TUPE : RS.6,78,600/ - @RS.2,37,500/ - PER ACRE AT THE TIME OF SIGNING OF THIS AGREEMENT BY CHEQUE NO. 247006 DATED 15 - 12 - 2005. RS.4,07,160/ - @RS.1,42,500/ - PER ACRE BY CHEQUE NO. 247014 DATED 15 - 01 - 2006. 7. TEJKUMAR MARUTI TUPE : RS.6,78,600/ - @RS.2,37,500/ - PER ACRE AT THE TIME OF SIGNING OF THIS AGREE MENT BY CHEQUE NO. 247007 DATED 15 - 12 - 2005. RS.4,07,160/ - @RS.1,42,500/ - PER ACRE BY CHEQUE NO. 247015 DATED 15 - 01 - 2006. 3.3 THE LD. AR SUBMITTED THAT FINAL JOINT VENTURE AGREEMENT WAS EXECUTED ON 17 - 01 - 2013 AND THE SAME WAS REGISTERED. THERE WERE MINOR MODIFICATIONS IN THE CONSIDERATION IN SUBSEQUENT AGREEMENT. AS PER REGISTERED AGREEMENT DATED 17 - 01 - 2013 THE OWNERS OF LAND G O T MINIMUM GUARANTEED CONSIDERATION OF RS.1.80 CRORES PER ACRE AND IN ADDITION THEY WOULD ALSO GET 30% OF SALE PROCEEDS OF BUILT U P AREA CONSTRUCTED ON THE AFORE SAID LAND. THUS, THE TOTAL MINIMUM GUARANTEE SALE CONSIDERATION FOR 19 ACRES OF LAND @ 1.80 CRORES PER ACRE COMES TO RS.34.20 CRORES. THE 7 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 1/5 TH SHARE OF THE ASSESSEE IN THE SAID CONSIDERATION IS RS.6.84 CORES. AFTER CLAIMI NG THE INDEXED COST OF ACQUISITION OF LAND AT RS.7,25,22,240/ - AND THE COST OF SALE OF LAND AT RS.9,13,558/ - THE ASSESSEE DECLARED LONG TERM CAPITAL LOSS OF RS.50,35,798/ - IN THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER REJ ECTED THE ASSESSEES COMPUTATION OF LONG TERM CAPITAL LOSS . THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 50C AND ADOPTED STAMP DUTY VALUE AS FAIR MARKET VALUE OF THE LAND AND DETERMINED ASSESSEES SHARE IN SALE CONSIDERATION AT RS.11,50,64,000/ - . THE ASSESSING OFFICER MADE ADDITION OF RS.4,16,28,202/ - AS LONG TERM CAPITAL GAIN IN THE HANDS OF ASSESSEE. THE ASSESSING OFFICER FURTHER DISALLOWED ASSESSEES CLAIM OF DEDUCTION U/S. 54F OF THE ACT. 3.4 AGGRIEVED BY THE ASSESSMENT ORDER DATED 30 - 0 3 - 2016, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO REJECTED THE CONTENTIONS OF ASSESSEE AND UPHELD THE ADDITIONS MADE BY ASSESSING OFFICER IN ASSESSMENT PROCEEDI NGS. 3.5 THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION BY INVOKING THE PROVISIONS OF SECTION 50C AND ADOPTING THE MARKET VALUE OF LAND AS ON 17 - 01 - 2013 I.E. THE DATE OF SUBSEQUENT DEVELOPMENT AGREEMENT. THE ASSESSING OFFICER SHOULD HAVE TAKEN THE VALUE OF LAND AS PER THE ORIGINAL AGREEMENT DATED 17 - 12 - 2005. THE NEED FOR EXECUTING SUBSEQUENT AGREEMENT AROSE AS PATILBUVA NAMDEO TUPE AND HOUSABAI PATILBUVA TUPE HAD DIED . THE LD. AR IN THE BACKDROP OF ABOVE FACTUAL MATRIX MADE THREE FOLD S UBMISSIONS TO SUBSTANTIATE HIS POINT RAISED IN ADDITIONAL GROUNDS OF APPEAL. 8 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 ( I ) THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS ERRED IN APPLYING PROVISIONS OF SECTION 50C . I F AT ALL THE ASSESSING OFFICER HAD TO INVOKE THE PROVISIONS OF SECTION 50C TH EN THE ASSESSING OFFICER OUGHT TO HAVE APPLIED THE PROVISO TO SECTION 50C AND WOULD HAVE CONSIDERED THE INITIAL JOINT VENTURE AGREEMENT DATED 17 - 12 - 2005. THE LD. AR FAIRLY POINTED THAT THE PROVISO TO SECTION 50C WAS INSERTED BY THE FINANCE ACT, 2016 W.E.F. 01 - 04 - 2017 , HOWEVER THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF DHARAMSHIBHAI SONANI VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED AS 57 ITR (TRIB.) 669 HAS HELD THE INSERTION OF PROVI SO TO SECTION 50C BY THE FINANCE ACT, 2016 APPLICABLE RETROSPECTIVELY. ( II ) THE ASSESSEE HAS ONLY TRANSFERRED RIGHTS IN THE PROPERTY AND NOT THE TITLE IN PROPERTY , THEREFORE, SECTION 50C WILL NOT APPLY. THE PROVISIONS OF SECTION 50C ARE NOT ATTRACTED WHERE TH ERE IS NO TRANSFER OF CAPITAL ASSET. THE LD. AR POINTED THAT THE DISTINGUISHING FEATURES IN THE JOINT VENTURE A GREEMENT IN PRESENT CASE IS THAT THE ASSESSEE HAS RETAINED THE RIGHT OF SHARE IN EXTRA FSI , IF ALLOWED IN FUTURE. THE LD. AR CONTENDED THAT THE PROVISIONS OF SECTION 50C CREATES A DEEMING FICTION THEREFORE, IT HAS TO BE CONSTRUED STRICTLY. ( III ) THE ASSESSING OFFICER HAS WRONGLY SUBSTITUTED THE STAMP DUTY VALUE OF RS.7,570/ - PER SQ. MTRS. FOR THE DEVELOPMENT RIGHTS OF LAND ON THE DATE OF REGISTRATION OF THE AGREEMENT BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. THE PROVISIONS OF SECTION 50C DOES NOT APPLY ON THE TRANSFER OF DEVELOPMENT RIGHTS. TO SUPPORT HIS CONTEN TIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VOLTAS LTD. VS. 9 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 INCOME TAX OFFICER REPORTED AS 74 T AXMANN.COM 99. THE LD. AR FURTHER SUBMITTED THAT SIMILAR VIEW HAS BEEN TAKEN BY MUMBAI BENCH OF TRIBUNAL IN THE CASE OF ATUL G. PURANIK VS. INCOME TAX OFFICER REPORTED AS 141 TTJ 69 AND THE SAID DECISION OF TRIBUNAL HAS BEEN UPHELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GREENFIELD HOTELS & ESTATES (P.) LTD. REPORTED AS 389 ITR 68. 3.6 THE LD. AR SUBMITTED THAT THE ADDITIONAL GROUNDS OF APPEAL RAISED BEFORE THE TRIBUNAL ARE PURELY LEGAL AND NO FURTHER ADDITIONAL EVIDENCE IS REQUIRED TO BE ADDUCED TO SUBSTANTIATE THEM. 4. SMT. NANDITA KANCHAN REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT. IN SO FAR AS THE EARLIER DEVELOPMENT AGREEMENT OF 2005 IS CONCERNED THE SAME HAS BEEN SUPERSEDED BY THE SUBSEQUENT DEVELOPMENT AGREEMENT EXECUTED IN THE YEAR 2013. THE LD. DR REFERRING TO THE CLAUSE 35 OF 2013 A GREEMENT AT PAGE 10 0 OF THE PAPER BOOK SUBMITTED THAT IT HAS BEEN SPECIFICALLY MENTIONED THAT THE EARLIER AGREEMENT BETWEEN THE LAND OWNERS AND AUOJUS LAND DEVELOPMENT AND CONSTRUCTION COMPANY (PVT.) LTD. (CONSENTING PARTY TO AGREEMENT DATED 17 - 12 - 2005) STAND SUPERSEDED BY T HIS AGREEMENT. THUS, THE DEVELOPMENT AGREEMENT EXECUTED IN 2005 IS SUPERSEDED BY THE AGREEMENT EXECUTED IN 2013. 4.1 FURTHER , THE LD. DR VEHEMENTLY OPPOSED ADMISSION OF ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. THE LD. DR SUBMITTED THAT THE ADDITIONA L GROUND S RAISED BY THE ASSESSEE REQUIRES VERIFICATION OF NEW DOCUMENTS. 10 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 HENCE, THE SAME SHOULD NOT BE ADMITTED. THE LD. DR CONTROVERTING THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VOLTAS LTD. VS. INCOME TAX OFFICER (SUPRA) SUBMITTED THA T THE PROPOSITION LAID DOWN IN THE SAID ORDER IS NOT A GOOD LAW. THE LD. DR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS : I . ARIF AKHATAR HUSSAIN VS. INCOME TAX OFFICER, 140 TTJ 413 (MUMBAI - TRIB.); II . ASSISTANT COMMISSIONER OF INCOME TAX VS. DATTANI DEVELOPMENT, 182 TTJ 230 (MUMBAI - TRIB.); III . CHIRANJEEV LAL KHANNA VS. INCOME TAX OFFICER, 144 TTJ 607 (MUMBAI - TRIB.); IV . SHAVO NORGREN (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX, 152 TTJ 482 (MUMBAI - TRIB.). 5. THE LD. AR CONTROVERTING THE SUBMISSIONS FORWARDED ON BEHALF OF THE DEPARTMENT SUBMITTED THAT THE EXPRESSION SUPERSEDED USED IN PARA 35 OF THE JOINT VENTURE A GREEMENT OF 2013 CONNOTES REPLACED. THE WORDS SUPERSEDED DOES NOT MEAN THAT THE EARLIER AGREEMENT HAS BEEN CANCELLED ALTOGETHER. THE LD. AR EXPLAINED THAT NEW AGREEMENT WAS REQUIRED TO BE EXECUTED AS TWO OF THE EXECUTANTS OF 2005 A GREEMENT I.E. PATILBUVA NAMDEO TUPE AND HOUSABAI PATILBUVA TUPE HAD DIED AND THEIR SHARE IN LAND WERE INHERITED BY THEIR LEGAL HEIRS I.E. THE OTHER CO - OWNERS. THE LD. AR FURTHER CONTENDED THAT ENTIRE MATERIAL IS AVAILABLE ON RECORD, EVEN IF SOME VERIFICATION IS REQUIRED TO BE DONE ON CERTAIN ASPECTS OF THE TRANSACTION THE SAME CAN BE DIRECTED BY THE TRIBUNAL. TO SUPPORT HIS SUBMISSIONS THE LD . AR PLACED RELIANCE ON THE FOLLOWING DECISIONS : I . COMMISSIONER OF INCOME TAX VS. KERALA STATE CO - OPERATIVE MARKETING FEDERATION LTD., 193 ITR 624 (KERALA); 11 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 II . CONTROLLER OF ESTATE DUTY VS. R. BRAHADEESWARAN, 163 ITR 680 (MADRAS). 6. W E HAVE HEARD THE SUBMISS IONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . WE HAVE ALSO CONSIDERED THE DOCUMENTS AND THE DECISIONS REFERRED BY BOTH THE SIDES. THE ASSESSEE IN ADDITIONAL GROUNDS OF APPEAL HAS ASSAILED INVOKING OF SECTION 50C OF THE ACT BY THE ASSESSING OFFICER. WE ARE OF CONSIDERED VIEW THAT THE ASSESSEE IN ADDITIONAL GROUNDS OF APPEAL HAVE RAISED LEGAL ISSUE OF APPLICABILITY OF SECTION 50C IN THE FACTS OF PRESENT CASE. THE CLOSE EXAMINATION OF JOINT VENTURE AGRE EMENTS (ALREADY ON RECORD) WOULD ASCERTAIN WHETHER THE PROVISIONS OF SECTION 50C WOULD BE ATTRACTED IN THE INSTANT CASE. THEREFORE, IN THE LIGHT OF THE DECISION RENDERED IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. COMMISSIONER OF INCOME TAX REPORTE D AS 229 ITR 383, THE ADDITIONAL GROUNDS RAISED BY ASSESSEE/APPELLANT ARE ADMITTED. 7. THE FIRST CONTENTION OF THE ASSESSEE IS THAT THE PROVISIONS OF SECTION 50C CANNOT BE INVOKED AS IT IS NOT THE CASE OF TRANSFER OF CAPITAL ASSET BUT MERE TRANSFER OF DEVELOPMENT RIGHTS IN A JOINT VENTURE AGREEMENT. THE LD. AR VEHEMENTLY ARGUED THAT THE ASSESSEE HAS NOT TRANSFERRED THE OWNERSHIP OF LAND BUT HAS MERELY TRANSFERRED RIGHTS TO DEVELOP THE LAND FOR TOWNSHIP SUBJECT TO RIDERS OF SHARING FUTURE PROFITS AND FS I. RELIANCE HAS BEEN PLACED ON THE DECISION OF VOLTAS LTD. VS. INCOME TAX OFFICER (SUPRA). THE TRIBUNAL IN THE SAID CASE STRICTLY INTERPRETING THE DEEMING PROVISIONS OF SECTION 50C HELD THAT TRANSFER OF DEVELOPMENT RIGHTS IN LAND DOES NOT CONSTITUTE TR ANSFER OF CAPITAL ASSET, HENCE PROVISIONS OF SECTION 50C COULD NOT BE APPLIED TO SALE OF DEVELOPMENT RIGHTS OF LAND. WE ARE OF CONSIDERED VIEW THAT SINCE THIS GROUND HAS BEEN RAISED FOR THE FIRST TIME BEFORE THE 12 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 TRIBUNAL AND THE AUTHORITIES BELOW HAD NO OCCASION TO DELIBERATE ON THIS FACET OF THE ISSUE , THE GROUND NO. 1 RAISED IN THE ADDITION AL GROUNDS OF APPEAL IS RESTORED TO THE FILE OF ASSESSING OFFICER FOR CONSIDERATION, IN ACCORDANCE WITH LAW. 8. IN THE SECOND ADDITIONAL GROUND OF APPEAL THE ASSESSEE HAS ASSAILED THAT WHILE INVOKING THE PROVISIONS OF SECTION 50C THE AUTHORITIES BELOW HAVE FAILED TO TAKE NOTE OF THE SECOND PROVISO TO SUB - SECTION (1) OF SECTION 50C OF THE ACT. BEFORE PROCEEDINGS FURTHER IT WOULD BE RELEVANT TO REFER TO SECOND P ROVISO INSERTED BY THE FINANCE ACT, 2016 W.E.F. 2017 . [ SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. 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 DUTY 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 CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. FOLLOWING PROVISOS SHALL BE INSERTED TO SUB - SECTION (1 ) OF SECTION 50C BY THE FINANCE ACT, 2016, W.E.F. 1 - 4 - 2017 : PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND HE 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 AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSE OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER : PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSI DERATION, 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 . 9 . THE LD. AR HAS ARGUED THAT THOUGH THE SECOND PROVISO IS INSERTED BY THE FINANCE ACT, 2016 BUT IT APPLIES RETROSPECTIVELY. R ELIANCE HAS BEEN PLACED ON THE DECISION OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF DHARAMSHIBHAI SONANI VS. ASSISTANT COMMISS IONER OF INCOME TAX (SUPRA). 13 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 FOR THE SAKE OF COMPLETENESS THE RELEVANT EXTRACT OF THE AFOREMENTIONED ORDER OF THE TRIBUNAL IS REPRODUCED HERE - IN - BELOW : 9. SO FAR AS THE AMENDMENT TO SECTION 50C BEING RETROSPECTIVE IN EFFECT IS CONCERNED, THERE IS NO DOU BT ABOUT THE LEGAL POSITION. I HOLD THE PROVISOS TO SECTION 50C BEING EFFECTIVE FROM 1 ST APRIL 2003. THIS IS PRECISELY WHAT THE LEARNED COUNSEL HAS PRAYED FOR. IN HIS DETAILED WRITTEN SUBMISSIONS, HE HAS MADE OUT OF A STRONG CASE FOR THE AMENDMENT TO SECTI ON 50C BEING TREATED AS RETROSPECTIVE AND WITH EFFECT FROM 1 ST APRIL 2003. THE PLEA OF THE ASSESSEE IS INDEED WELL TAKEN AND DESERVES ACCEPTANCE. WHAT FOLLOWS IS THIS. THE MATTER WILL NOW GO BACK TO THE ASSESSING OFFICER. IN CASE HE FINDS THAT A REGISTERED AGREEMENT TO SELL, AS CLAIMED BY THE ASSESSEE, WAS ACTUALLY EXECUTED ON 29.6.2005 AND THE PARTIAL SALE CONSIDERATION WAS RECEIVED THROUGH BANKING CHANNELS, THE ASSESSING OFFICER, SO FAR AS COMPUTATION OF CAPITAL GAINS IS CONCERNED, WILL ADOPT STAMP DUTY V ALUATION, AS ON 29.6.2005, OF THE PROPERTY SOLD AS IT EXISTED AT THAT POINT OF TIME. IN CASE THE ASSESSEE IS NOT CONTENT WITH THIS VALUE BEING ADOPTED UNDER SECTION 50C, HE WILL BE AT LIBERTY TO SEEK THE MATTER BEING REFERRED TO THE DVO FOR VALUATION, AGAI N AS ON 29.6.2005, OF THE SAID PROPERTY. AS A COROLLARY THERETO, THE SUBSEQUENT DEVELOPMENTS IN RESPECT OF THE PROPERTY SOLD (E.G. THE CONVERSION OF USE OF LAND) ARE TO BE IGNORED. IT IS ON THIS BASIS THAT THE CAPITAL GAINS WILL BE RECOMPUTED. WITH THESE D IRECTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO, AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE AND BY WAY OF A SPEAKING ORDER. I ORDER SO. 10. AS I PART WITH THE MATTER, I MAY MAKE ONE MORE OBSE RVATION. THE AMENDMENT IN SECTION 50C WAS BROUGHT IN TO PROVIDE RELIEF TO THE ASSESSEE IN A SITUATION IN WHICH THE STAMP DUTY VALUATION OF A PROPERTY HAS RISEN BETWEEN THE DATE OF EXECUTION OF AGREEMENT TO SELL AND EXECUTION OF SALE DEED, AS IS THE NORM RA THER THAN EXCEPTION, BUT THE REAL ESTATE MARKET IS NOW TRAVERSING THROUGH A DIFFICULT PHASE AND THERE CAN BE SITUATIONS IN WHICH THERE IS A FALL IN THE STAMP DUTY VALUATION RATES WITH THE PASSAGE OF TIME. SUCH A SITUATION HAS ACTUALLY ARISEN IN MANY PLACES IN THE COUNTRY, SUCH AS IN GURGAON , NEW DELHI AND EVEN IN DEHRADUN UTTARAKHAND) AND SOME OTHER PLACES. IT IS THEREFORE POSSIBLE THAT, AT FIRST SIGHT, FIRST PROVISO TO SECTION 50C MAY SEEM TO WORK TO THE DISADVANTAGE OF THE ASSESSEE IN CERTAIN SITUATION I N THE EVENT OF THE WORD MAY BEING CONSTRUED AS MANDATORY IN APPLICATION, BUT THEN ONE CANNOT BE OBLIVIOUS TO THE FACT THAT THIS PROVISO STATES THAT '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 (EMPHASIS SUPPLIED) MAKING IT CLEARLY OPTIONAL TO THE ASSESSEE, AND THAT, IN ANY EVENT, WHAT HAS BEEN BROUGHT BY THE LAWMAKERS AS A MEASURE OF RELIEF TO THE TAXPAYERS CA NNOT BE CONSTRUED AS RESULTING IN A HIGHER TAX BURDEN ON THE TAXPAYERS. OF COURSE, ASSUMING THAT MY UNDERSTANDING OF THIS STATUTORY PROVISION IS IN HARMONY WITH THE LEGISLATIVE INTENTION, INSERTION OF WORDS AT THE OPTION OF THE ASSESSEE BETWEEN 'STAMP VA LUATION AUTHORITY ON THE DATE OF AGREEMENT MAY AND 'BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER, IN FIRST PROVISIO TO SECTION 50C(1), COULD HAVE MADE THE LEGAL PROVISION EVEN MORE UNAMBIGUOUS. 14 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 WE FIND THAT SIMILAR VIEW WITH RESPECT TO RETROSPECTIVE APPLICABILITY OF PROVISO TO SECTION 50C INSERTED BY FINANCE ACT, 2016, HAS BEEN TAKEN BY THE ALLAHABAD BENCH IN THE CASE OF HARI MOHAN DAS TANDON (HUF) VS. PR. COMMISSIONER OF INCOME TAX REPORTED AS 91 TAXMANN.COM 199. THUS, IN VIEW OF THE ABOVE DECISION S OF TRIBUNAL IT IS CLEAR THAT THE PROVISO TO SECTION 50C INSERTED BY FINANCE ACT, 2016 HAS RETROSPECTIVE APPLICATION W.E.F. 1 ST APRIL, 2003. 10. NOW, THAT THE APPLICATION OF PROVISO TO SECTION 50C IS HELD TO BE RETROSPECTIVE, THE ADDITIONAL GROUND NO. 2 IS RESTORED TO THE FILE OF ASSESSING OFFICER FOR ADJUDICATION IN THE LIGHT OF OUR ABOVE FINDINGS. 11. THE ADDITIONAL GROUND NO. 3 AND THE GROUND OF APPEAL NO. 1 IS CONSEQUENTIAL THEREFORE BOTH THESE GROUNDS AR E RESTORED TO ASSESSING OFFICER FOR ADJUDICATION/DE NOVO ADJUDICATION IN THE NEW SCENARIO. THE ASSESSING OFFICER WHILE DECIDING ALL THESE ISSUES SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW. 12. THUS, THE APPEAL OF ASSESSEE IN ITA NO. 523/PUN/2018 IS ALLOWED FOR STATISTICAL PURPOSE. ITA NOS. 524 & 525/PUN/2018 1 3 . BOTH THE SIDES ARE UNANIMOUS IN STATING THAT THE GROUNDS/ADDITIONAL GROUNDS OF APPEAL RAISED IN ITA NOS. 524 & 525/PUN/2018 ARE IDENTICAL TO THE GROUNDS/ADDITIONAL GROUNDS RAISED IN ITA NO. 523/PUN/2018. THE TRANSACTION OF SALE OF LAND INVOLVED IN BOTH THESE APPEALS IS SAME WHICH IS SUBJECT MATTER OF APPEAL IN ITA NO. 523/PUN/2018. ALL THE THREE APPELLANTS ARE RELATED TO EACH OTHER. THUS, IN VI EW OF THE FACT THAT THE 15 ITA NO S.523, 524 & 525/PUN/2018, A.Y. 2013 - 14 ISSUE IN ALL THE APPEALS IS IDENTICAL AND IS ARISING FROM SAME JOINT VENTURE AGREEMENT FOR TRANSFER OF RIGHTS IN LAND THE FINDINGS GIVEN BY US WHILE ADJUDICATING THE APPEAL IN ITA NO. 523/PUN/2018 WOULD MUTATIS MUTANDIS APPLY TO BOT H THE APPEALS IN ITA NOS. 524 & 525/PUN/2018, AS WELL. 14. RESULTANTLY, THE APPEALS OF BOTH THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE. 15. TO SUM UP, ALL THE THREE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON MONDAY, TH E 26 TH DAY OF NOVEMBER, 201 8 . SD/ - SD/ - ( R.S. SYAL ) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 26 TH NOVEMBER, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 7 , PUNE 4. THE PR. C . I . T . - 6 , PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE