BOC India Limited, Kolkata V. Addl. CIT, Range - 12, Kolkata, Kolkata

ITA 806/KOL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5114 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 25-05-2011
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR CIT LD
• Assessee Lawyers: BASANT GADH YAN LD ARS OF
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Fair market value; Valuation report
• Section: 143(3); 50C; 37

Judgement Text

ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, KOLKATA BEFORE : SHRI N.V. VASUDEVAN, JUDICIAL MEMBER, A ND SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A NO. 806/KOL/2011 A.Y 2007-08 M/S. LINDE INDIA LIMITED VS. ADDL. CIT, RANGE-12, KOLKATA (FORMERLY KNOWN AS BOC INDIA LIMITED) PAN: AAACB 2528H (APPELLANT/ASSESSEE) (RESPONDE NT/DEPARTMENT) I.T.A NO. 872/KOL/2011 A.Y 2007-08 D.C.I.T, CIR-12, KOLKATA VS. M/S. LINDE INDIA LIMITED (DEPARTMENT) (FORMERLY KNOWN AS BO C INDIA LIMITED) (ASSESSEE/RESPONDENT) FOR THE APPELLANT/ASSESSEE: S/SHRI GIRISH DA VE, SENIOR COUNSEL HARDIK LAKHANI, HI MANSHU PATEL & BASANT GADH YAN, LD. ARS OF THE ASSESSEE FOR THE RESPONDENT : SHRI NIRA J KUMAR, CIT/LD.DR DATE OF HEARING: 18-01-2016 DATE OF PRONOUNCEMENT: 17 -02-20 16 ORDER SHRI M.BALAGANESH, AM THESE CROSS APPEALS OF THE ASSESSEE AS WELL AS THE REVENUE ARISE OUT OF THE ORDER OF THE LEARNED CIT(A)-XII, KOL. IN APPEAL NO. 460/CIT (A)-XII/ADDL.CIT, R-12/10-11 DATED 30-03-2011 FOR THE ASST YEAR 2007-08 AGAINST THE ORDER OF ASSESSMENT FRAMED BY THE LEARNED AO U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. BOTH THE APPEALS ARE TAKEN UP TOGETHER AND D ISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 2 3. THE FIRST ISSUE TO BE DECIDED IN BOTH THE APPEAL S OF THE ASSESSEE AS WELL AS THE REVENUE IS AS TO WHETHER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT COULD BE INVOKED TOWARDS THE PAYMENT OF RS.72,89,71,972/- MADE ON ACCOUNT OF OFFSHORE SUPPLY OF EQUIPMENTS. ITA NO. 806/KOL/2011 FOR A.Y 2007-08 (BY THE ASSES SEE) 4. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUND:- THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(APPEALS) ERRED IN NOT DECIDING THE ISSUE OF APP LICABILITY OF TDS PROVISIONS ON PAYMENT OF RS.72,89,71,972/- BEING MA DE ON ACCOUNT OF OFFSHORE SUPPLY OF EQUIPMENTS. ITA NO. 872/KOL/2011 FOR A.Y 2007-08 (BY THE REVEN UE) 5. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUND:- THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.72,89,71,972/- U/S. 40(A)(IA) WITHOUT APPRECIATI NG THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSE SSEE IS A COMPANY ENGAGED, INTER-ALIA, IN THE BUSINESS OF MANUFACTURE AND SALE OF VARIOUS INDUSTRIAL AND MECHANICAL GASES (VIZ. OXYGEN, NITROGEN, DISSOLVED ACETYLENE ETC) CRYOGEN IC AND NON-CRYOGENIC PLANTS AND VESSELS. THE LD. AO OBSERVED THAT IN RESPECT OF ADV ANCES LYING ON 31-03-2007 IN RESPECT OF IMPORT OF CAPITAL GOODS THE TAX WAS NOT DEDUCTED AT SOURCE [TDS] IN TERMS OF PROVISIONS OF SECTION 40(A(IA) OF THE ACT FOR WHICH SHOW CAUSE NO TICE WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THE SHOW CAUSE NOTICE THE ASSESSEE REPL IED THAT THIS AMOUNT REPRESENTS ADVANCES MADE FOR IMPORT OF CAPITAL GOODS, WHICH IS OUTSTANDING AS ON 31-03-2007. SUCH ADVANCES WERE MADE TOWARDS PURCHASE/IMPORT OF CAPI TAL GOODS ON FOB BASIS AT FOREIGN SEA PORTS, LEADING TO THE TRANSFER OF TITLE TO THE GOODS OUTSIDE INDIA. HENCE, THERE IS NO INCOME BEING CHARGEABLE TO INCOME-TAX IN INDIA. ACC ORDINGLY, THE PROVISIONS OF SECTION 195 OF THE ACT ARE NOT ATTRACTED. IT WAS ALSO STATE D THAT SUCH ADVANCES TO SUPPLIERS HAVE NOT BEEN CHARGED TO THE P & L ACCOUNT FOR THE YEAR UNDE R CONSIDERATION AS PER THE METHOD OF ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 3 ACCOUNTING FOLLOWED BY THE ASSESSEE. IN VIEW OF TH E AFORESAID FACTS, IT WAS ARGUED THAT QUESTION OF ADVANCES FALLING UNDER THE AMBIT OF DIS ALLOWANCE/ADDITION U/S. 40(A)(IA) OF THE ACT DOES NOT ARISE. FURTHER, IT WAS SUBMITTED THAT IN CONNECTION WITH THE TRANSACTION IN INDIA, THE ASSESSEE STATED THAT TAX WAS DULY DEDUCT ED AND DEPOSITED AS APPLICABLE IN ACCORDANCE WITH THE PROVISIONS UNDER CHAPTER XVIIB OF THE ACT. THE LD. AO DID NOT AGREE WITH THE CONTENTIONS OF THE ASSESSEE AND CONC LUDED THAT THE TRANSACTION IS A COMPOSITE TECHNICAL CONTRACT AND THE PAYMENT MADE THEREON IS A LUMP-SUM CONSIDERATION. THE LD.AO ALSO OBSERVED THAT THERE IS CLOSE NEXUS , LINK, RELATIONSHIP AND COMMONNESS INTEREST BETWEEN M/S. BOC INDIA LTD, THE ASSESSEE H EREIN AND LINDE AG, A GERMAN COMPANY. ACCORDING TO THE LD.AO, THE TECHNICAL CONT RACT IS COVERED U/S. 9(1)(VII) OF THE ACT. SECTION 195 OF THE ACT IS APPLICABLE ON ENTIR E AMOUNT PAID TO LINDE AG, A GERMAN COMPANY AND THEREFORE, WITHHOLDING TAX SHOULD HAVE BEEN DEDUCTED U/S. 195 OF THE ACT. IN VIEW OF THIS, THE LD.AO TREATED THE ENTIRE PAYME NT OF RS. 4,45,03,392/- AND ADVANCE OF RS.42,10,04,615/- AND RS.81,86,94,472/- PAID AS A DVANCE DURING THE YEAR TO LINDE AG FOR EXECUTION OF TECHNICAL SERVICES AND DISALLOWED THE SAME U/S. 40(A)(IA) OF THE ACT. THE TOTAL INCOME WAS DETERMINED BY THE LD.AO AT RS.227, 71,50,506/- AFTER MAKING OTHER ADDITIONS. LATER, AN ORDER U/S. 143(3) R.W.S 154 WA S PASSED BY THE LD.AO ON 27-01-2011 DETERMINING THE TAXABLE INCOME AT RS.1,72,19,20,000 /-. IN THIS ORDER, THE DISALLOWANCE MADE U/S. 40(A)(IA) ON ACCOUNT OF IMPORT OF GOODS W AS RESTRICTED TO RS.72,89,71,972/-. 7. BEFORE THE LD. CIT(A), IT WAS CONTENDED BY THE A SSESSEE THAT NO TAX WAS REQUIRED TO BE DEDUCTED ON THIS TRANSACTION, AS EQUIPMENTS WE RE PURCHASED OUTSIDE INDIA AND THE PAYMENT WAS ALSO MADE OUTSIDE INDIA. IT WAS ARGUED THAT SUCH SUM IS NOT CHARGEABLE TO TAX IN INDIA AND HENCE THERE IS NO REQUIREMENT WITHHOLD ING THE TAX IN TERMS OF SECTION 195 OF THE ACT. IT WAS EXPLAINED BEFORE THE LD.AO THAT SU CH SUM WAS NOT CHARGED TO THE P & L ACCOUNT FOR THE YEAR UNDER CONSIDERATION. THE ASSES SEE HAS ALSO NOT CLAIMED ANY DEPRECIATION IN COMPUTING THE TAXABLE INCOME FOR T HE YEAR UNDER APPEAL. BASED ON THIS SUBMISSION, THE LD.CIT(A) DELETED THE IMPUGNED ADDI TION/DISALLOWANCE MADE U/S. 40(A)(IA) OF THE ACT BY THE LD.AO. AGGRIEVED, THE REVENUE I S IN APPEAL BEFORE US. THE ASSESSEE IS ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 4 ALSO IN APPEAL BEFORE US ON THE NON-APPLICABILITY O F TDS PROVISIONS FOR PAYMENTS MADE ON ACCOUNT OF OFFSHORE SUPPLY OF EQUIPMENTS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD.AO WAS NOT JUSTIFIED IN INVOKI NG THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT TO MAKE DISALLOWANCE OF RS.72,89,71,972/-, BECAUSE IT IS NOT IN DISPUTE THAT THE PAYMENT OF THE AFORESAID AMOUNT HAS BEEN MADE BY TH E ASSESSEE COMPANY AS ADVANCE TO A NON-RESIDENT COMPANY NAMED AS LINDE AG, A RESIDENT OF GERMANY. WE HOLD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE APPL ICABLE ONLY IN THE CASES WHERE ANY INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALTY, F EES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES HAS BEEN PAID OR PAYABLE TO A R ESIDENT. IN THE CASE OF ASSESSEE COMPANY, THE PAYMENTS WERE MADE TO A NON RESIDENT GERMAN COM PANY, THE FACT WHICH IS UNDISPUTED ON RECORD. HENCE, THE PROVISIONS OF SECTION 40(A)(I A) CANNOT BE INVOKED IN THIS CASE. WE FIND THAT IF AT ALL, THE AFORESAID AMOUNT OF PAYME NT MADE TO M/S. LINDE AG IS DISALLOWABLE, THE DISALLOWANCE COULD BE MADE ONL Y U/S. 40(A)(I) OF THE ACT. WE FIND THAT AS PER THE PROVISIONS OF SECTION 40(A)(I) OF THE AC T ANY INTEREST, ROYALTY, FEES FOR TECHNICAL SERVICES OR OTHER SUM CHARGEABLE UNDER THIS ACT, WH ICH IS PAYABLE OUTSIDE INDIA; OR IN INDIA TO A NON-RESIDENT, NOT BEING A COMPANY OR TO A FOREIGN COMPANY, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID DURING THE PREVIOUS Y EAR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTIO N (1) OF SECTION 200, SUCH AN EXPENDITURE SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. WE HOLD THAT EVEN IN THE CASE OF DISALLOWANCE40(A) OF THE ACT, IT IS NECESSARY THAT THE PAYMENT SHOULD BE OF ANY INTEREST, ROYALTY, FEES FOR TECHNICAL SERVICES AND OTHER SUM WHICH IS CHARGEABLE UNDER THE ACT AND PAYABLE OUTSIDE INDIA OR IN INDIA TO A NON RESIDEN T. WE HOLD THAT IN ORDER TO INVOKE THE PROVISIONS OF SECTION 40(A), THE PRIMARY CONDITION IS THAT SUCH SUM PAID SHOULD BE CHARGEABLE UNDER THE ACT, I.E IT SHOULD HAVE BEEN D EBITED TO THE PROFIT & LOSS A/C AND CLAIMED AS DEDUCTION. IF AN ASSESSEE HAS PAID ANY S UM OF THE NATURE MENTIONED ABOVE OUTSIDE INDIA OR IN INDIA TO A RESIDENT, BUT HAS NOT BEEN DEBITED TO THE PROFIT & LOSS A/C ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 5 AND HAS NOT BEEN CLAIMED AS DEDUCTION IN COMPUTIN G THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, THE DISALLOWANCE CANNOT BE MADE. ON PERUSAL OF LETTER DATED 1/12/2010 AND BALANCE SHEET AS ON 31/3/2007, WE FIND THAT THE ASSESSEE HAS SHOWN CAPITAL WORK- IN- PROGRESS AS ON 31/3/2007 AMOUNTING TO RS. 130,31,87,000/-. THIS INCLUDES CAPITAL ADVANCE OF RS. 84,40,14,000. WE ALSO FIND THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S HAD FILED COMPLETE PARTY WISE DETAILS OF CAPITAL WORK-IN- PROGRESS OF RS.130,31,8 7,000/-. THE PAYMENT OF RS.84,40,14,000/-, WHICH IS THE PART OF CAPITAL ADV ANCE AND APPEARING IN THE CAPITAL WORK- IN- PROGRESS INCLUDES A SUM OF RS. 72,33,40,648/- M ADE TO M/S. LINDE AG AND BESIDES THERE WAS PAYMENT OF RS.56,31,324/- TO THE SAID GERMAN COMPANY, WHICH WAS APPEARING UNDER THE HEAD LOANS & ADVANCES. THUS, WE FIND TH AT THE TOTAL OF AFORESAID AMOUNTS COME TO RS.72,89,71,972/- I.E (RS.72,33,40,648 + RS .56,31,324). THESE SUMS ARE PART OF CAPITAL WORK-IN-PROGRESS AND LOANS AND ADVANCES AND NOT CHARGED TO THE PROFIT & LOSS A/C AND THE ASSESSEE HAS NOT CLAIMED THE SAME AS DEDUCT ION WHILE COMPUTING THE INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSI ON. MOREOVER, THE SUBJECT MENTIONED PAYMENTS ARE NOT CHARGEABLE TO TAX IN INDIA IN TERM S OF SECTION 195 OF THE ACT. HENCE, NO DISALLOWANCE COULD BE MADE U/S. 40(A)(I)/40(A)(IA) OF THE ACT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED AND THAT OF THE REVENU ES APPEAL IS DISMISSED. 9. THE SECOND ISSUE TO BE DECIDED IN THE APPEAL O F THE ASSESSEE IS AS TO WHETHER THE LD. CIT(A) IS CORRECT IN DIRECTING THE LD.AO TO ADO PT THE VALUATION DONE BY THE DVO(DISTRICT VALUATION OFFICER) FOR THE PURPOSE OF COMPUTING CAPITAL GAINS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSE SSEE SOLD MEASURING 13.90 ACRES OF LAND STRUCTURE THEREON TO M/S. EMMAR MGF LAND PVT. LTD ON 21 ST JUNE 2006 IN RESPECT OF PROPERTY SITUATED AT OLD DOOR NO.7A, NEW NO.75, VYT HIANATHA MUDALI STREET, THONDIARPET VILLAGE, CHENNAI FOR A SUM OF RS. 25.05 CRORES AND DECLARED LONG TERM CAPITAL GAINS THEREON. THE LD.AO OBSERVED THAT THE STAMP DU TY VALUATION IN RESPECT OF SUBJECT MENTIONED PROPERTY WAS OF RS. 53.50 CRORES. THE LD .AO ISSUED A SHOW CAUSE NOTICE TO THE ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 6 ASSESSEE AS TO WHY THE STAMP DUTY VALUED RS.53.50 C RORES SHOULD NOT BE SUBSTITUTED AS SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING THE CAPI TAL GAINS. THE LD.AO REFERRED THE VALUATION OF THE SUBJECT MENTIONED PROPERTY IN QUES TION TO THE DVO ON 22-11-2010. SINCE TIME LIMIT FOR COMPLETING THE ASSESSMENT EXPIRED ON 30/12/2010 AND IN VIEW OF THE FACT THAT THE LD.DVO DID NOT SUBMIT HIS VALUATION REPORT , THE LD.AO PROCEEDED TO COMPLETE THE ASSESSMENT U/S. 143(3) ON 30-12-2010 BY ADOPTING THE STAMP DUTY VALUATION U/S. 50C OF THE ACT AND RE-COMPUTED THE LONG TERM CAPITAL GAINS IN RESPECT OF THE SUBJECT MENTIONED PROPERTY. THE ASSESSEE PREFERRED FIRST APPEAL BEFO RE THE LD. CIT(A). DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD.DVO HAD SUBMITTED HIS REPORT ON 4-3-2011 VALUING THE SUBJECT MENTIONED PROPERTY AT RS.27,13,27,000/-. T HE LD.CIT(A) AFTER CONSIDERING THE VARIOUS SUBMISSIONS OF THE ASSESSEE DIRECTED THE LD .AO TO ADOPT THE VALUE AS GIVEN BY THE LD.DVO AND RE-COMPUTE THE LONG-TERM CAPITAL GA INS ACCORDINGLY. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GR OUNDS:- 2(A) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF T HE CASE, THE CIT (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFICER TO COMPUTE LONG TERM CAPITAL GAINS ARISING FROM SALE OF PROPERTY AT CHEN NAI ON THE BASIS OF VALUATION REPORT OF THE DISTRICT VALUATION OFFICER. 2(B) WITHOUT PREJUDICE TO GROUND NO. 2(A) ABOVE, FO R THAT THE APPELLANT HAVING CHALLENGED THE CONSTITUTIONAL VALIDITY OF SE CTION 50C OF THE ACT AS VIOLATIVE OF ARTICLE 14, 265 AND 300A OF THE CONSTI TUTION OF INDIA, THE PURPORTED ORDER OF ASSESSMENT ON THE BASIS OF THE V ALUE OF THE LAND AS DETERMINED UNDER THE TAMIL NADU STAMP DUTY ACT FOR DETERMINING THE CAPITAL GAINS IS ILLEGAL, INVALID AND WITHOUT ANY A UTHORITY OF LAW. 2( C) WITHOUT PREJUDICE TO GROUND NO. 2( A) & 2(B) ABOVE, THE CIT(APPEALS) ERRED IN NOT APPRECIATING THAT PROVISI ONS OF SECTION 50C IS NOT APPLICABLE ON SALE OF BUILDING, BEING DEPRECIAB LE ASSETS. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BOOK OF THE ASSESSEE F ILED BEFORE US. THE FACTS AS STATED HEREINABOVE REMAIN UNDISPUTED AND HENCE ARE NOT REI TERATED HEREIN FOR THE SAKE OF BREVITY. WE FIND THAT THE LD.DVO HAD ALSO ADOPTED STAMP DU TY RATE @ RS. 861 PER SQ.FT IN RESPECT OF SUBJECT MENTIONED PROPERTY. WE ALSO FIN D FROM THE PAPER BOOK THAT THE ASSESSEE SUBMITTED THE REGISTERED VALUERS REPORT, WHEREIN THE SAID VALUER HAD ADOPTED THE ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 7 RATE @ RS.830/- PER SQ. FT FOR THE VALUATION OF LAN D. IN THE SAID VALUATION REPORT THE RATE PER SQ.FT PREVAILING IN VARIOUS STREETS ARE MENTIONED A S BELOW:- VAIDYANATHAN STREET - RS 728/- PER SQ.FT THIRUVOTTRIYUR HIGH ROAD (PARTICULAR STRETCH) - RS 983/- PER SQ.FT ELAYA MUDALI STREET - RS 537/- PER SQ.FT SENNIAMMAN KOIL STREET - RS 861/- PER SQ.FT WE FIND THAT THE LD DVO OBSERVED THAT THE SUBJECT M ENTIONED PROPERTY IS NEARER TO SENNIAMMAN KOIL STREET. THE LD.DVO ADOPTED THE GUI DELINE VALUE RATE OF SENNIAMMAN KOIL STREET AND ADDED 15% FOR FRONTAGE ON BOTH SIDE ROADS AND ARRIVED THE RATE PER SQ.FT AS RS. 990/- PER SQ.FT. WE FIND THAT TOTAL LAND AREA C ONVEYED IN THE REGISTERED SALE DEED WAS 6,05,804 SQ.FT. THE LD.DVO HAD ADOPTED THE NET AREA AVAILABLE FOR SALE OF LAND AT 4,54,353 SQ.FT AFTER DEDUCTING THE AREA REQUIRED FOR LAYOUT SERVICES AND AMENITIES @25% AND THEN ESTIMATED THE NET AREA AVAILABLE FOR SALE OF LAND AT RS.44,98,09,470/- [ 454353X RS.990 I.E. THE RATE OF RS.861/SQ.FT BEING GUIDELINES VALU E + RS.129/SQ.FT 15% FRONTAGE ON BOTH SIDES]. NOW, IT IS PERTINENT TO REPRODUCE THE PROVI SIONS SECTION 50C OF THE ACT AT THIS JUNCTURE:- SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N 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 BU ILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTH ORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAM P 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 O F SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACC RUING AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHO RITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORI TY, COURT OR THE HIGH COURT, ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 8 THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE P ROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECT ION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1 957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-S ECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION 1.FOR THE PURPOSES OF THIS SECTION, 'V ALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF T HE WEALTH-TAX ACT, 1957 (27 OF 1957). EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, TH E EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AU THORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY REFERRE D TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER. 11.1 FROM THE ABOVE, IT COULD BE SEEN THAT EVEN THE PROVISIONS OF SECTION 50C CONTEMPLATES THE ADOPTION OF FAIR MARKET VALUE FOR THE PURPOSE OF VALUATION OF THE PROPERTY. WE HOLD THAT ONCE THE DETERMINATION OF FAIR MARKET VALUE IS UNDER CONSIDERATION ALL THE RELEVANT FACTORS I.E. LAND AREA AVAILABLE FOR CONSTRUCTION SHOULD BE TAKEN INTO ACCOUNT IRRESPECTIVE OF THE ACTUAL LAND AREA CONVEY ED. ACCORDINGLY, WE ARE IN AGREEMENT WITH THE AREA OF LAND AS ADOPTED BY THE LD.DVO . H OWEVER, WE FIND THAT AS PER THE VALUATION OF PROPERTY IS CONCERNED, IT IS NOT CORRE CT ON THE PART OF LD.DVO TO ADD TOWARDS 15% FRONTAGE ON BOTH SIDES OF THE ROAD IN ORDER TO ARRIVE AT THE TOTAL RATE AT RS.990/- PER SQ.FT AS ULTIMATELY THE LD.DVO ADOPTED THE GUIDEL INE VALUE RATE OF SENNIAMMAN KOIL STREET AT RS.861/- PER SQ.FT. IN VIEW OF THE ABOV E, WE HOLD THAT THE LAND SHOULD BE VALUED BY ADOPTING THE RATE AT RS.861/SQ.FT FOR THE AREA O F 4,54,353 SQ.FT. ACCORDINGLY, ASSESSEE GETS A RELIEF FOR THE RATE OF RS.129/SQ.FT. THE LD. AO IS DIRECTED TO REWORK THE CAPITAL GAINS BY ADOPTING RS. 861/- PER SQ.FT BEING THE GUI DELINE VALUE IN THE SAME MANNER IN WHICH THE LD DVO HAD CARRIED OUT THE VALUATION. GROUND NOS.2(A) TO 2( B) ARE ALLOWED SUBJECT TO THE DIRECTION CONTAINED HEREIN ABOVE. ITA NOS. 806 & 872/KOL/2011-B-AM M/S.LINDE INDIA LIMITED 9 11.2 IN RESPECT OF VALUATION OF BUILDING, THE ASSES SEE HAS ADOPTED RS.1,34,02,000/- AS SALE CONSIDERATION ATTRIBUTABLE TO THE BUILDING IN THE SALE DEED, WE FIND FROM THE LD.DVOS REPORT THAT THE SAME VALUATION HAS BEEN ADOPTED FOR THE BUILDING. WE HOLD THAT NO INTERFERENCE NEEDS TO BE MADE WITH REGARD TO THE V ALUATION OF THE BUILDING. GROUND NO. 2 ( C) OF ASSESSEES APPEAL IS DISMISSED. 12. GROUND NOS. 3 & 4 ARE GENERAL IN NATURE AND REQ UIRE NO ADJUDICATION. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED AS STATED ABOVE. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 17-02- 2016 1. . THE APPELLANT: M/S. LINDE INDIA LIMITED (FORMERLY KNOWN AS BOC INDIA LIMITED) OXYGEN HOUSE P-43 TARATALA ROAD, KOL-88. 2 THE RESPONDENT- THE ADDL.CIT, RANGE-12/DCIT, CIR-1 2, KOLKATA. 3 / THE CIT, 4.THE CIT(A) 5 . DR, KOLKATA BENCH 6 . GUARD FILE . TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS SD/- ( N.V. VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 17 -02-2016 COPY OF THE ORDER FORWARDED TO:-