ACIT, Circle-6(1), Hyderabad V. Sri Balaji Constructions Company, Hyderabad

ITA 883/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4842 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-06-2012
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: B SATYANARAYANA MURTHY
• Keywords: Capital asset; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.883/HYD/2012 : ASSESSMENT YEAR 2006 - 07 ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE 6(1), HYDERABAD. V/S M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD ( PAN A BBFS 4064 J ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.H.NAIK DR RESPONDENT BY : SHRI B.SATYANARAYANA MURTHY DATE OF HEARING 24.09.2013 DATE OF PRONOUNCEMENT 31.10.2013 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) GUNTUR , DATED 28.2.2012, FOR THE ASSESSMENT YEAR 2007 - 08. 2. GROUNDS OF THE REVENUE IN THIS APPEAL ARE AS FOLLOWS - 1) THE LEARNED CIT(A) ERRED BOTH IN LAW AND ON FACTS. 2) THE DECISION OF CIT(A) RELYING ON ASSESSEES SUBMI S SION S IN PERVERSE TO THE FACTS OF THE CASE INASMUCH AS THE SRO FURNISHED FMV FOR THE PURPOSE OF STAMP DUTY FOR BARE STRUCTURE ONLY AND NOT FOR INTERIORS. 3 ) THE LEARNED CIT(A) ERRED IN NOT FOLLOWING THE SRO VALUE FOR COMPUTING THE CON S ID E RATION RECEIVED ON ACCOUNT O F DEVELOPM E NT AGR E EMENT BY THE ASSESSEE. 4) .. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FIRM FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 07 ON 30.10.2006, I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 2 ADMITTING TOTAL INCOME OF RS .1,34,63,6570 FROM CAPITAL GAINS AND BUSINESS. THE ASSESSEE HAD GI VEN THEIR LAND IN HYDERABAD ON DEVELOPM E N T A N D RECEIVED BUILT UP AREA IN RETURN. WHILE CALCULATING CAPITAL G AINS ON TH E SAME, ASSESSEE HAS CL A IM E D AN AMOUNT OF RS .38,21,126 AS IN D E X ED COST OF IMPROVEMENT OF THE LAND, INCLU D IN G AN AMOUNT O F RS .4,98,396 STATED TO HAVE BEEN SP E NT ON CON S TRUC T ION PERMISSION FEES. WHILE COMPL E TING THE ASSESSMENT UNDER S.143(3), THE ASSESSING OFFICER DI S ALLO W ED THE CONSTRUCTION PERMISSION FEE AMOUNTING TO RS.4,98,396 UN D ER THE HEAD DI S ALLO W ANCE IN COST OF IMP R OVEMEN T TO LAN D, AS TH E RE WAS NO PROOF OF HAVING SPENT THAT AMOUNT. FURTH E R, THE ASSESSEE RECEIVED BUILT UP AREA IN RETURN IN THE FORM OF CERTAIN FLATS, OUT OF WHICH ONLY ONE WAS SOLD A ND REMAINING WERE USED TO MAINTAIN AN INDU S TRIAL PARK. THUS, THE TRANSFER OF THE A SSERTS HAS HAPPEN E D TWICE THE FIRST BEIN G TRANSFER OF LAND TO BUILDER AND SECOND BEIN G TRANSFER OF LAND SHARE AND BUILT UP AREA RECEIVED TOGETHER. TH E REFORE, THE ASSESSING OFFICER HAS OPINED THAT ETH CAPITAL GAINS H A VE TO B E CALCULATED IN THREE STAGES, I. E. (I) LONG TERM CAPITAL GAINS ON LAND TRANSFERRED TO BUILDER (II)LONG TERM CAPITAL GAINS ON UNDIVIDED SHARE OF LAND SOLD WITH FLATS; AND (III)SHORT TERM CAPITAL GAINS ON THE BUILT UP AREA RECEIVED WHEN SOLD. HOWEVER, THE ASSESSEE HAS SHOWED CAPITAL GAINS ONLY AS A LUMP SUM LONG TERM CAPITAL GAINS ON THE SALE CONSIDERATION RECEIVE ON SALE OF F LATS. THE ASSESSING OFFICER HAS NO T AC C EPTED THIS CONTENTION OF THE ASSESSEE, AS HE WAS OF THE VIEW TH A T THE RECEIPT AND SALE HAS TAKEN PL A CE IN TH E SAM E YEAR AND HENCE, THE ASSET IS STILL A SHO R T TERM ASSET AND NO T A LONG TERMS ASSET AND THE SALE PROC E EDS ON THE VALUE OF THE FLATS SHOULD BE CON S I D ERED AS SHO R T TERM CAPITAL GAINS. THE ASSESSING OFFICER FURTHER OPINED THAT IN RESPECT OF THE UND I VIDED SHARE OF THE LAND SOLD, THE LAND HAVING BEEN WITH THE ASSESSEE FOR MORE THAN THREE YE A RS, IS A LONG TERM ASSET AND THE SALE PROCEEDS F R OM THE L A N D WOULD B E BROUGHT TO TAX A LONG TERM CAPITAL G A INS. AS THE S ALE AGREEMENTS CLEARLY MENTIONED BOTH THE SHARE OF LAND AND AREA OF T H E FLATS BEING PASSED ON, TH EY HAVE TO B E TRATEED SEPAR A T E LY AND GOING I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 3 BY THE PERIOD OF HOL D ING OF THE ASSETS, THE SHO R T TERM CAPITAL GA I N S ON THE SALE VALUE OF BUILT UP AREA AND THE LONG TERM CAPITAL GAINS ON TH E SALE VALUE OF THE LAND HAVE B EEN CALCULATED BY THE ASSESSING OFFICER. AFTER RECALCULATING THE SAME, LONG TERM CAPITAL GAINS WERE WORKED OUT AT R S .3,02,42,695 ON LAND AND R S .4,17,048 AS SHORT TERM CAPITAL GAINS ON BUILT UP AREA RECEIVED FROM THE BUILDER, WHEREAS THE ASSESSEE HAS SHOWN ONLY RS.1,08,01,004 AS LONG TERM CAPI T AL GAINS ON THIS PROPERTY . THEREFORE, THE DIFFERENCE AMOUN T OF RS.1,94,41,691 WAS ADDED TO LONG TERM CAPITAL GAINS AND RS.4,17,048 WAS BROUGHT TO TAX AS SHORT TERM CAPITAL GAINS. 4. BEFORE THE CIT(A), THE LEARNED AUTHORISED REPRESENTATIVE MADE WRITTEN SUBMISSIONS ON 11.3.2011 FOR ESTIMATING THE FULL VALUE OF CONSIDERATION AT RS.3,77,40,390 AS AGAINST RS.2,72,30,000 ADOPTED BY THE ASSESSEE FIRM, WHICH AS EXTRACTED BY THE CIT(A), IN PARA 5 TO 5.2 OF THE IMPUGNED ORD ER READ AS FOLLOWS - 'THE APPELLANT IS A PARTNERSHIP FIRM HAD LAND ADMEASURING 7502 SQ. YARDS IN RAJBHAVAN ROAD, HYDERABAD, IN A LOW - LYING AREA. THE APPELLANT - FIRM HAD GIVE IN THIS LAND ON DEVELOPMENT TO M/S JANAPRIYA ENGINEERS SYNDICATE VIDE DEVELOPMENT A G REEMENT DATED 01.10.1994. AS PER THE DEVELOPMENT AGREEMENT, THE DEVELOPER WAS TO CONSTRUCT A COMPLEX AND TO HANDOVER SO% THEREOF TO THE APPELLANT - FIRM WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF THE MUNICIPAL SANCT ION FOR THE COMPLEX. THERE WAS INORDINATE DELAY IN THE CONSTRUCTION AND FINALLY THE COMPLEX WAS READY IN THE YEAR 20 05 . THE CONSTRUCTED AREA ALONG WITH PROPORTIONATE SHARE IN THE UNDIVIDED LAND BELONGING TO THE APPELLANT - FIRM WAS REGISTERED IN FAVOUR OF TH E APPELLANT FIRM VIDE DOCUMENTS EXECUTED IN THE FINANCIAL YEAR 2005 - 06. THE APPELLANT - FIRM IN ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 07 DECLARED CAPITAL GAIN ON ACCOUNT OF THE DEVELOPMENT. THE AGGREGATE VALUE OF ALL THE SALE DEEDS OF THE AREA F ALLING TO THE SHARE OF THE APPELLANT - FIRM AS PER THE SALE DEED WAS RS. 2,72,30,000/ - . THIS WAS ADOPTED AS THE C ONSIDERATION IN THE COMPUTATION OF CAPITAL GAIN. HOWEVER, THE A SSESSING OFFICER IN THE ASSESSMENT ORDER DATED 24.12.2008 ESTIMATED THE F ULL VALUE OF CONSIDERATION ON THE BASIS OF THE CERTIFICATE FROM THE S UB - REGISTRAR'S OFFICE, CERTIFYING THE BASIC VALUES FOR REGISTRATION. WHILE DOING SO, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE APPELLANT - FIRM THAT IN THE PRESENCE OF REGISTRATION VALUES AVAIL ABLE IN THE REGISTERED SALE DEED IN RESPECT OF THE CONSTRUCTED AREA FALLING TO THE SHARE OF THE APPELLANT - FIRM, SUCH VALUES SHOULD NOT BE ESTIMATED. 2. THE ONLY ISSUE BEFORE THE CIT(A) IS THE ESTI M ATION OF FULL VALUE O F CON S ID E RATION OF THE CONSTRUCTED AREA THAT CAME TO THE SHARE OF THE APPELLANT FIRM AT R S .3,77,40,000/ - IN THE PL A CE OF R S .2,72,30,000/ - AS OFFERED BY THE APPELLANT - FIRM. WE WISH TO BRIN G TO TH E NO T ICE OF THE HONBL E COMMISSIONER OF INCOME - TAX(APPEALS) THAT THIS AMOUNT FOR RS .2,72,30,000/ - DECL A RED BY TH E APPELLANT - FIRM ON TH E B A SIS OF THE V ALUE IN THE SALE DEEDS EXECUTED AND I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 4 REGISTERED IN RESPECT OF THE CONSTRUCTED AREA OBTAINED BY THE APPELLANT - FIRM AND THE SALE DEEDS WERE. PRESENTED BEFORE 'THE ASSESSING OFFICER. THE ASSESSING OFFICER ADOPTED THE SALE CONSIDERATION ON AN ESTIMATE ON THE BASIS OF A CERTIFICATE OBTAINED FROM THE SUB - REGISTRAR'S OFFICE AS TO THE BASIC RATES OF PROPERTIES FOR REGISTRATION. THE ADOPTION OF AN ESTIMATED VALUE FOR THE PURPOSE OF COMPUTING CAPITAL GAIN IS NOT P ROVIDED IN THE INCOME TAX ACT, EXCEPT SECTION 50 C OF THE INCOME TAX ACT. SECTION 50 C ONLY GIVES SCOPE FOR ADOPTION FOR CONSIDERATION AT THE RATE TAKEN INTO ACCOUNT BY THE SUB - REGISTRAR FOR COLLECTING STAMP DUTY AND REGISTRATION CHARGES, IN CASE SUCH VALUE IS MORE THAN THE CONSIDERATION SHOWN IN THE SALE DEEDS. BUT, THE CASE BEFORE THE HON'BLE CIT (A) IS THAT THE APPELLANT - FIRM DECLARED THE VALUE OF THE PROPERTY AT THE RATE ON THE BASIS OF WHICH STAMP DUTY AND REGISTRATION CHARGES WERE COLLECTED. THE ADOPTIO N OF AN ESTIMATE FOR THE PURPOSE OF COMPUTING CAPITAL GAINS IN THIS MATTER IS NOT CORRECT. 3. THE CERTIFICATE ON THE BASIS OF WHICH THE ASSESSING OFFICER ESTIMATED THE VALUE IS A GENERAL CERTIFICATE WHEREAS THE APPELLANT - FIRM ALSO SUBMITTED BEFORE THE ASSESSING OFFICER A STATEMENT SHOWING THE ACTUAL VALUES AT WHICH THE REGISTRATION OF THE SALE D EEDS WAS AFFECTED. WE EN<;:LOSE AS ANNEXURE - I, A COPY OF THE MEMO NO.337/08, DATED 23.12.2008~ IN THE COURSE OF THE PROCEEDINGS FOR THE REMAND REPORT, THE ASSESSING OFFICER OBTAINED A LETTER FROM THE JOINT SUB - REGISTRAR AS TO THE BASIS ON WHICH THE REGISTRATION WAS DONE OF THE DOCUMENTS IN QUESTION. THE JOINT SUB - REGISTRAR IN HIS MEMO DATED 04.06.2 010 HAS GIVEN THE DETAILS OF THE WORKING OF THE VALUE ON THE BASIS OF WHICH STAMP DUTY AND REGISTRATION CHARGES WERE COLLECTED ON THE DOCUMENTS IN QUESTION. 4. THE HONBLE COMMISSIONER OF INCOME - TAX WILL APPRECIATE THAT THE APPELLANT FIRM HAS EXPLAINED IN THE COU R SE OF THE ASSESSMENT PROCEEDINGS THAT THE DEVELOPER HAS ONLY CON S TRU C TED A BASI C STRUCTURE WITH MINIMUM F ITTINGS AND ARRANGED THE TENANTS. THE TENANTS BEING THE SOFTWARE COMPANIES HAVE DONE THEIR INTERIORS AND FINISHING AS PER THEIR REQUIREMENT S. THER E FORE, WHAT WAS OBTAINED BY THE AP P ELLAN T FIRM FROM THE DEVELOPER WAS THE BASIC STRUCTURE WITHOUT MUCH FINISHING AND AMENITIES. FOR THE SAKE OF READY REFERENCE, WE REPRODUCE BELOW THE DETAILS OF DOCUMENT NO.1440 OF 2005 FOR EXPLAINING THE CALCULATIO N DONE BY THE SUB - REGISTRAR. 'WITH REFERENCE TO THE DOC.NO.L440/2005, THE SUPER BUILT - UP AREA SHOWN IN THE DOCUMENT WAS1966 SQ.FT., WHICH IS ROOF LEVEL ALONG WITH CAR PARKING AREA OF 280 SQ.FT., AND SCOOTER PARKING AREA OF 75 SQ. FT. MARKET VALUE ARRIVED BY THE SUB - REGISTRAR IS AS PER THE RATES PREVAILING ON THE DATE OF REGISTRATION IS AS FO LL OWS': - BUILT - UP RATE PER VALUE RS. REBATE VALUE RS. AREA SQ.FT. 1966 X 400 = 7,86,400 ( - ) 314560 = 4,71,840 PARKING 270 = 95,850 ( - ) NIL = 95,850 355 X 5,67,690, OR MARKET VALUE 5,68,000 THUS, THE VALUE OF RS. 5,68,OOOI - ADOPTED FOR THE PROPERTY REPRESENTED BY DOCUMENT N O .1440 WAS RS. 5,68,OOOI - AND THIS AMOUNT WAS ADOPTED BY THE APPELLANT - FIRM FOR DECLARING THE CAPITAL GAINS. THEREFORE, THE APPELLANT - FIRM HAS CORRECTLY DECLARED THE VALUE OF THE PROPERTIES OBTAINED AS PER THE DEVELOPMENT AGREEMENT AND THEREFORE, NO ADDITION IS REQUIRED ON THIS ACCOUNT BY THE ASSESSING OFFICER. I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 5 5. REFERRING TO TH E REMAND REPO R T, WE WISH TO A DD THAT THE REGISTRATION W AS DONE OF THE PROPERTY OBTAINED FROM THE D E VELOPER IN TH E S HAPE IN WHICH IT WAS GIVE N . THE MARKET V ALUE O F ALL THE PROPERTIES RECEIVED BY THE APPELLANT - FIRM AFTER SO MANY YEARS OF WAITING FROM 1997 TO 20 0 5 W AS DECLARED IN THE COM P U TA TION OF CAPITAL GAINS. THE ASSESSING OFFICER CANNOT TAX FOR SOMETHING THAT THE APPELLANT FIRM DID NO T OBTAIN FROM THE DEVELOPER. THER E FORE, THE CONTENTION OF THE ASSESSING OFFICER THAT THE ESTIMATED VALUES ON THE BASIS OF GE NERAL RATE OF ITEMS WHICH THE APPELLANT - FIRM SHOULD HAVE GOT FROM THE DEVELOPER IS ILLEGAL AND IMPROPER. SUBSEQUENTLY ON 07.07.2011, THE ASSESSEE HAD FILED ANOTHER LETTER, IN WHICH, AS EXTRACTED BY THE CIT(A) IN PARA 5.2 OF THE IMPUGNED ORDER, IT IS STAT ED AS FOLLOWS - 'THE BALANCE IN THE ACCOUNT OF THE LAND AND LAND DEVELOPMENT AS ON 01.04.2005 WAS RS.1 ,02,74,955/ - . OUR FIRM WAS CONSTITUTED BY DEED OF PARTNERSHIP, DATED 01.04.1984 WITH EFFECT FROM THAT DATE. THE FIRM PURCHASED THE LAND IN 1984 WHEN THE LAND OWNERS HAVE BECOME PARTNERS IN THE FIRM VIDE DEED DATED 01.04.1984. THE LAND WAS LOW - LYING, WAS AFFECTED BY PROTECTED TENANTS AND WAS COVERED BY THE PROVISIONS OF THE ULC ACT. THERE WAS A NALA ABETTING THE LAND. THE FIRM HAD TO DEAL WITH PROTECTED TENANTS AND DEAL WITH THE MUNICIPAL AUTHORITY FOR DIVERTING .THE NALA AND HAD TO GET THE CLEARANCE FROM THE ULC. THE LAND OWNERS HAD THE LAND IN CANTONMENT. THEREFORE, THE FIRM HAD TO APPROACH THE' ULC, GOVERNMENT OF A.P., AND ULC CANTONMENT BOARD. ALL THESE PROCESS WAS TIME CONSUMING. THE LEVELLING OF THE LAND AND CONSTRUCTING A COMPOUND WALL TOOK ENORMOUS TIME AND THERE WERE PROTESTS FROM THE NEIGHBOURS AND GOVERNMENT DEPARTMENTS. THE SETTLEMENT WITH THE PROTECTED TENANTS ALSO TOOK LOT OF TIME. ALL THIS WORK WAS CARRIED OUT DURING THE PERIOD FROM 1984 TO 1994. IT WAS AT THAT TIME THAT WE COULD ENTER INTO A DEVELOPMENT AGREEMENT. AS PER THE DEVELOPMENT AGREEMENT, THE SHARING BETWEEN THE DEVELOPERS AND OWNERS WAS 5 0:50. WE RECEIVED THE FOLLOWING AREAS TO OUR SHARE PARTICULARS AREA(IN SQ.FT) OFFICE AREA 98299 CAR PARK 21400 SCOOTER PARK 4175 TOTAL 123874 WE ENCLOSE HEREWITH THE LEASE DEEDS IN THE CA S E OF ADP PVT. LTD. AND 24/7 PVT. LTD. THE COST OF LAND DEVELOPMENT AND THEIR INDEXED COST ARE AS UNDER: - PARTICULARS COST RS. INDEXED COST RS LAND 75,07,000 1,26,84,078 LAND DEVELOPMENT 27,67,955 38,21,126 . ON CONSIDERATION OF THE CONTENTION S O F TH E ASSESSEE , THE LEARNED CIT(A) OBSER VE D T H A T THE VALUE OF THE BUILT UP AR E A TRANS F ERRED TO THE ASSESSEE HAS TO BE CONSIDERED AT R S .2,72,3000 ON THE BASIS OF THE VALUE I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 6 MENTION E D IN THE R E GISTERED SALE DEED RATHER THAN THE CERTIFICATE ISSUED BY THE SRO AT RS.3,77,40,390. AC C OR D ING TO THE CIT(A), THE SRO HAS GIVEN A GENERAL CERTIFICATE AS TO WHAT COULD BE THE RANGE OF VALUES IN THE AREA CONCERNED, WITH REFERENCE TO GR O UND FLOOR, FIRST FLOOR ETC., WHEREAS THE VALUES MEN TIONED BY THE ASSESSEE WERE THE AMOUNTS ACTUALLY APPEARING IN THE SALE DEED EX E CUTED BY THE ASSESSEE AND DEVELOPER IN RESPECT OF INDIVIDUAL PROPERTIES. THE ASSESSEE ALSO GIVEN THE EXPLANATION BEFORE THE CIT(A) THAT AT THE TIM E OF REGISTRATION, WHAT WAS TR ANSFERRED AS THE BARE STRUCTURE OF THE BUILDING AND TENANTS HAVE GOT THE INTERIORS COMPLETED BASED ON THEIR OWN INDIVIDUAL NEEDS. BEING SO, IT CANNOT BE CON S I D ERED THAT THE ASSESSEE HA S CARRIED OUT ANY INTERIOR WORKS TO THE BUILDING. FURTHER, THE CIT(A) OBSERVED THAT THE ASSESSING OFFICER IS NO T JU S TI F IED IN MECHANICALLY ADOPTING THE VALUE GIVEN BY TH E S RO AND WITHOUT BRINGING ANYTHING ON RECORD TO SAY THAT THE VALUE ADOPTED FOR REGISTRATION BY THE ASSESSEE AND THE DEVELOPER WAS VERY LOW AND IT WAS DONE WITH THE CON N I V ANCE WITH THE R E GI S TRATION AUTHO R ITI E S SO AS TO SAY THAT T H E ASSESSEE HAS REGISTERED INCOMPLETE PROPERTY FOR VERY LOW VALUE. THUS, HE REJECTED THE FIN D IN G S OF THE ASSESSING OFFICER IN WORKING OUT THE SALE CONSI DE RATION OF LAND BASED ON T HE RATES AS PER CERTIFICATE ISSUED BY THE SRO AND HE DIREC T ED THE ASSESSING OFFICER TO CON S I D ER THE ACTUAL CONSIDERATION MENTIONED IN THE SALE DEED. ACCORD I NGLY, HE SUBSTITUTED THE VALUE AT RS.2,72,30,000 IN THE PLACE OF VALUE ADOPTED BY THE ASSESSING OFF ICER AT RS.3,77,40,390. AGAIN S T THIS FINDING OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, STRONGLY SUPPORTING THE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN GOING BY THE VA LUES AS MENTIONED IN THE REGISTERED SALE DEEDS, IGNORING THE VALUES AS DETERMINED BY THE SRO. I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 7 6. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND, REITERATING THE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES STRONGLY RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN GOING BY THE VALUES DETERMINED BY THE SRO, WHICH ARE MEANT ONLY FOR STAMP DUTY PURPOSES. HE SUBMITTED THAT IN THE ABSENCE OF ANY MATERIAL BROUGHT ON RECORD TO INDICATE THAT WHAT WAS MENT IONED IN THE REGISTERED SALE DEEDS IS NOT CORRECT, AND SOME CONSIDERATION OVER AND ABOVE THE SAME HAS IN FACT BEEN RECEIVED BY THE ASSESSEE, NO ADDITION COULD HAVE BEEN MADE BY THE ASSESSING OFFICER. HE SUBMITTED THAT WHAT WAS REGISTERED WAS ONLY BARE STR UCTURES WITH NO INTERIOR WORKS DONE BY THE TIME OF REGISTRATION, AND THAT BEING SO, OBVIOUSLY, THE VALUES MENTIONED IN THE SALE DEEDS REGISTERED WERE LOWER THAN THE VALUES AS PER SUB - REGISTRAR OFFICE. 7 . W E HAVE CON S I DE RED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE M A TE RI AL AVAILABLE ON RECORD. ADMITTEDLY, THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS WITH REGARD TO THE VALUES ADOPTED AS PER SALE DEEDS FOR COMPUTATION OF CAPITAL GAINS, INSTEAD OF VALUES DETERMINED BY THE SRO. IN OUR OPINION, THE CIT(A) IS JUSTIFIED IN ADOPTING THE ACTUAL VALUE MENTIONED IN TH E SALE DEED RATHER THAN ADOPTING THE VALUE FURNISHED BY TH E S RO IN ITS CERTIFICATE. THE VALUE DETERMINED BY THE SRO IS AFTER THE DATE OF REGISTRATION OF SALE DEED AND IT IS ALS O OF GENERAL NATURE. THERE IS NO DISPUTE THAT THE IMPUGNED PROPERTY WAS REGISTERED AT THE VALUES AS APPLICABLE FOR REGISTRATION PURPOSES. BE I NG SO, THE CON S I D ERATION OF THE CERTIFICATE ISSUED BY THE SRO AFTER THE REGISTRATION IS OVER CANNOT BE ACCEPTED FO R THE PURPOSES OF REGISTRATION OF THE SALE CONSIDERATION. FURTHER, T HE CALCULATION OF CAPITAL GAIN CAN ONLY BE WITH REFERENCE TO ACTUAL AMOUNT RECEIVED AND NOT ON ANY OTHER NOTIONAL VALUE WHICH IS TAKEN TO BE THE MARKET VALUE. THE SALE CONSIDERATION ACT UALLY RECEIVED BY THE CASE CANNOT BE REJECTED UNLESS THERE IS EVIDENCE TO SHOW THAT THE ASSESSEE HAS RECEIVED MORE MONEY THAN WHAT IS SHOWN TO THE I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 8 DEPARTMENT. EVEN IF IT IS ASSUMED THAT THE ASSETS ARE TRANSFERRED ON A VALUE LESS THAN THE MARKET VALUE, AN D AS LONG AS SALE CONSIDERATION RECEIVED IS AS PER THE DOCUMENT, THE CAPITAL GAIN CAN ONLY BE CALCULATED ON THE ACTUAL AMOUNT RECEIVED AND NOT ON ANY OTHER VALUE TAKEN TO BE THE MARKET VALUE. IN THE PRESENT CASE, THERE IS NO EVIDENCE TO SHOW THAT THE ASSE SSEE HAVING RECEIVED SALE CONSIDERATION IN EXCESS OF THE CONSIDERATION SHOWN TO THE DEPARTMENT. WE ARE NOT IN A POSITION TO HOLD THAT THE ASSESSEE HAS SUPPRESSED THE SALES CONSIDERATION. EVEN OTHERWISE, THE EXPRESSION 'FULL VALUE OF CONSIDERATION' CANNOT BE CONSTRUED AS HAVING REFERENCE TO THE MARKET VALUE OF THE ASSETS, BUT ONLY MEANS THAT THE FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE ON SALE. ACCORDINGLY, PLACING RELIANCE ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF K.P. VERGHESE VS. ITO (131 ITR 597) (SC), WHEREIN THE APEX COURT HELD THAT SECTION 52(2) OF THE INCOME - TAX ACT, 1961, CAN BE INVOKED ONLY WHERE THE CONSIDERATION FOR THE TRANSFER OF A CAPITAL ASSET HAS BEEN UNDERSTATED BY THE ASSESSEE, OR, IN OTHER WORDS, THE FULL VALUE OF THE CONSIDERATION IN RESPECT OF THE TRANSFER IS SHOWN AT A LESSER FIGURE THAN THAT ACTUALLY RECEIVED BY THE ASSESSEE, AND THE BURDEN OF PROVING UNDERSTATEMENT OR CONCEALMENT IS ON THE REVENUE; AND THE SUB - SECTION HAS NO APPLICATION IN THE CASE OF A BONA FI DE TRANSACTION WHERE THE CONSIDERATION RECEIVED BY THE ASSESSEE HAS BEEN CORRECTLY DECLARED. IN VIEW OF THE FINDING OF FACT RECORDED BY THE TRIBUNAL, THERE WAS NO QUESTION OF INVOKING SECTION 52(2) OF THE ACT. THE HIGH COURT WAS, THEREFORE, RIGHT IN REFUSI NG TO CALL FOR THE REFERENCE FROM THE TRIBUNAL AND REJECTING THE APPLICATION UNDER SECTION 256(2) OF THE ACT , WE ARE NOT INCLINED TO ALLOW THE GROUNDS TAKEN BY THE REVENUE. IN OUR OPINION, THE CIT(A) IS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ADO PT THE VALUE MENTION E D IN THE R E GISTERE D SALE DEED AT R S .2,72,30,000 IN THE PLACE OF VALUE AS PER THE CERTIFICATE OF TH E SRO , I.E. RS.3,77,40,390. WE ACCORDINGLY UPHOLD THE ACTION OF THE CIT(A) AND REJECT THE GROUNDS OF THE REVENUE IN THIS APPEAL. I TA NO. 883/HYD/2012 M/S. BALAJI CONSTRUCTION COMPANY, HYDERABAD 9 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31.10.2013 . SD/ - SD/ - ( ASHA VIJAYARAGHAVAN ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER. DT/ - 31 ST OCTO B E R, 2013 COPY FORWARDED TO: 1. 2 . 3 4. M/S. BALAJI CONSTRUCTION COMPANY, 6 - 3 - 1102111, 603/4, BLOCK 1, WHITE HOUSE, BEGUMPET, HYDERABAD ASST. COMMISSIONER OF INCOME - TAX CIRCLE 6 ( 1 ), HYDERABAD . COMMISSIONER OF INCOME - TAX(APPEALS) GUNTUR COMMISSIONER OF INCOME - TAX GUNTUR 5 . DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S.