GIRISH BHUTRA, Jaipur V. ITO, Jaipur

ITA 926/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5556 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 24-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DHK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Retrospective amendment
• Section: 43CA; 43B; 143(3); 50C; 54F; 2(14)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 926/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 GIRISH BHUTRA C/O KALANI & CO. CA, 5 TH FLOOR, MILE STONE GANDHI NAGAR TURN, JAIPUR CUKE VS. ITO WARD-2(1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AISPB9766C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C.PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11.1.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28.2.2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT (A)-I, JAIPUR DATED 26.09.2016 PERTAINING TO ASSESSMENT YE AR 2012-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE FINDINGS OF AO THAT SHORT TERM CAPITAL GAINS OF RS. 1,52,38,594/- ARISES ON SALE OF PLOT NO. BC-26, BC- 29, BC-115 & BC-105, CENTRAL SPINE B-BLOCK YOJANA, JAGAPURA, SANGANER, J AIPUR AS AGAINST LONG TERM CAPITAL GAIN OF RS. 22,03,144/- DECLARED BY TH E ASSESSEE ON THE SALE OF RIGHT IN THESE PLOTS BY:- (I) NOT PROPERLY APPRECIATING THAT ASSESSEE ACQUIRED RI GHT IN THE ABOVE PLOTS IN PURSUANCE TO THE DECISION OF THE GOVERNMEN T DT. 12.04.2007 FOR WHICH FORMAL RESERVATION LETTER WAS ISSUED ON 20.08.2007. (II) HOLDING THAT THE ASSESSEE ACQUIRED THE PLOTS UNDER CONSIDERATION ON 21.07.2011 WHICH WAS SOLD ON 02.08.2011 WHEREAS WHA T THE ASSESSEE SOLD AS PER AGREEMENT TO SALE DT. 26.05.20 10 IS ONLY THE 2 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA RIGHT IN LAND WHICH IS A LONG TERM ASSET AND ON 02. 08.2011 ONLY THE FORMAL TITLE WAS PASSED ON TO THE BUYER. (III) ADOPTING THE SALE VALUE OF PLOTS/RIGHT IN PLOT AS P ER SECTION 50C ON THE BASIS OF VALUE ASSESSED BY SUB REGISTRAR ON THE DATE OFF SALE(I.E. 02.08.2011) AS AGAINST THAT ASSESSABLE ON THE DATE OF AGREEMENT (I.E. 26.05.2010) WHEN THE SALE CONSIDERATION OF RI GHT IN THE PLOTS WAS DETERMINED. (IV) NOT GIVING THE BENEFIT OF INDEXATION FOR COST OF IM PROVEMENT OF RS. 1,14,704/- (V) NOT ALLOWING EXEMPTION U/S 54F OF RS. 99,27,487/- 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY ANY OF THE GROUNDS OF APPEAL. 3. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 2. BRIEFLY STATED THE FACTS ARE THAT CASE OF THE AS SESSEE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VID E ORDER DATED 2 ND MARCH, 2015. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DECLARED LONG-TERM CAPITAL GAIN OF RS. 20,94,096/-. THE ASSESSING OFFICER COMPUTED THE SHORT-TERM CAPITAL GAIN AT RS. 1,52,38,594/- AS AGAINST THE LONG-TERM CAPITAL GAIN CLAIMED BY THE ASSESSEE. THE ASSESSING OFFICER ALSO DISALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF DEDUCTION UNDER SECTION 54F OF THE ACT. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT (APPEALS), WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 3 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA 3. GROUND NO. 1(I) & (II) RELATES TO COMPUTATION O F SHORT-TERM CAPITAL GAIN AS AGAINST THE LONG TERM CAPITAL GAIN CLAIMED BY THE A SSESSEE. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER :- 1. FROM THE FACTS STATED ABOVE, THE FOLLOWING THREE IS SUES ARISES FOR CONSIDERATION:- (I) HOW THE HOLDING PERIOD OF THE CAPITAL ASSET ACQ UIRED BY THE ASSESSEE BY WAY OF RIGHT IN THE ADDITIONAL COMPENSATION BE COMPUTED? (II) WHAT SHOULD BE THE FULL VALUE OF THE CONSIDERA TION RECEIVED OR ACCRUED AS A RESULT OF THE TRANSFER VIS-A-VIS SECTION 50C OF THE ACT? (III) WHETHER DEDUCTION U/S 54F IS ALLOWABLE TO THE ASSESSEE ON SUCH CAPITAL GAIN OR NOT? 2. IN RESPECT OF THE FIRST ISSUE I.E. FOR COMPUTING THE HOLDING PERIOD, WE ARE TO SUBMIT AS UNDER:- (I) THE DATE WISE EVENT RELATING TO THE RIGHT IN AD DITIONAL COMPENSATION ACQUIRED BY THE ASSESSEE, THE PLOTS/RIGHT IN THE PLOT ALLOTTED TO T HE ASSESSEE AND THE SALE THEREOF, FOR A READY REFERENCE IS TABULATED AS UNDER:- DATE PARTICULARS 27-10-2005 NOTIFICATION ISSUED BY PRINCIPAL SECRETA RY, URBAN DEVELOPMENT DEPARTMENT, GOVERNMENT OF RAJASTHAN THAT CONSIDERIN G THE OBJECTION OF THE LAND HOLDERS AND CONSIDERING THE SUBSTANTIAL INCREASE IN THE VALUE OF THE LAND, THE STATE GOVERNMENT HAS TAKEN A DECISION TO ALLOT 20% OF DEVELOPED RESIDENTIAL LAND AND 5% OF DEVELOP ED COMMERCIAL LAND IN PLACE OF 15% ALLOTTED EARLIER. 06-07-2006 26-10-2006 & 12-04-07 NECESSARY CIRCULARS WERE ISSUED TO ALLOT THE ADDITI ONAL 10% OF THE DEVELOPED LAND. 28-04-2007 THE JDA ISSUED RESERVATION LETTER TO THE APPELLANT FOR RESERVING 1997 SQ. MT. OF DEVELOPED LAND, OUT OF WHICH 962 SQ. MT. WAS RESERVED TOWARDS RESIDENTIAL PLOT, 962 SQ. MT. WAS RESERVED TOWARDS COMMERCIAL PLOT AND 73 SQ. MT. WAS RESERVED TOWARDS SHORTFALL IN THE EARLIER COMPENSATION. AS PER POINT NO.11 OF THE RESERVATION LETTER, THE A SSESSEE CAN PLEDGE THE SAME WITH BANKS/FINANCIAL INSTITUTION TO GET LO ANS FOR HOUSE CONSTRUCTION. AS PER POINT NO.15, ASSESSEE CAN ALSO SALE THE SAME AND THE TRANSFER FORMALITIES FOR WHICH IS TO BE CARRIED OUT AS PER JDA RULES. THESE CONDITIONS DEPICT THAT ON 28.04.2007, ASSESSEE GOT UNCONDITIONAL RIGHT OF ALLOTMENT OF THE PLOT. 4 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA 10-12-2009 THE JDA ISSUED ALLOTMENT LETTER ON 10-12-2009 SPECI FYING THE NUMBER AND AREA OF PLOT. IN THE LETTER IT IS SPECIF IED THAT THE ALLOTMENT IS MADE IN PURSUANCE TO THE CIRCULAR DT. 27-10-2005 , 06-07-2006, 26- 06-2006 & 12-04-2007 ISSUED BY THE GOVERNMENT. 26-05-2010 AGREEMENT FOR SALE OF PLOT NO.BC-26 & BC -29 ENTERED EVEN WHEN THERE WAS NO PHYSICAL POSSESSION OF THE PLOT. THIS AGREEMENT IS REGISTERED ON WHICH STAMP DUTY WAS PAID. AS PER THE AGREEMENT IT IS THE DUTY OF THE ASSESSEE TO EXECUTE THE SALE DEED O F THESE PLOTS AFTER OBTAINING THE POSSESSION AND PATTA OF THESE PLOTS. 19-07-2011 & 26-07-2011 JDA ISSUED LETTER TO DEPOSIT THE LEASE DEED CHARGES . THE AMOUNT WAS DEPOSITED AND THEREAFTER THE POSSESSION OF THE PLOT S WAS HANDED OVER TO THE APPELLANT ON 21/07/2011 AND LEASE DEED ISSUE D ON 26/07/2011. 02-08-2011 SALE DEED WAS EXECUTED IN FAVOUR OF GULM OHAR BUILDHOME PRIVATE LIMITED IN RESPECT OF THE ABOVE TWO PLOTS. (II) FROM THE ABOVE EVENTS IT CAN BE NOTED THAT ON 26.05.2010, ASSESSEE ENTERED INTO AN AGREEMENT TO SALE HIS RIGHT IN THE PLOT WHICH HE AC QUIRED THROUGH RESERVATION LETTER DATED 28-04-2007. THE POSSESSION OF THE RIGHT IN TH E PLOT WAS GIVEN TO THE BUYER WHEN THE SALE DEED WAS EXECUTED ON 02.08.2011. THUS , IT IS RIGHT IN THE PLOT WHICH IS SOLD BY THE ASSESSEE AND SINCE THIS RIGHT IS HELD F OR MORE THAN 3 YEARS, WHAT THE ASSESSEE SOLD IS A LONG TERM CAPITAL ASSET. (III) SECTION 2(14) OF THE ACT DEFINES CAPITAL ASSE T TO MEAN PROPERTY OF ANY KIND HELD BY AN ASSESSEE. THE TERM PROPERTY HAS WIDE IMPORT. THE AO HAS NARROWED DOWN ITS MEANING IN AS MUCH AS HE HAS GIVEN UNDUE SIGNIFICAN CE TO THE PHYSICAL POSSESSION OF THE PROPERTY. HE FAILED TO APPRECIATE THAT ANY RIGH T OF AN ASSESSEE WHICH CAN BE LAWFULLY EXERCISED IS ALSO A PROPERTY FOR THE PURPO SE OF SECTION 45 OF THE ACT. EVEN A BENEFICIAL RIGHT TO OR A THING CONSIDERED AS HAVING A MONEY VALUE IS A PROPERTY. IT IS AN ESTABLISHED LAW THAT THE WORD PROPERTY SHOULD BE GIVEN A LIBERAL AND WIDE CONNOTATION. IT HAS BEEN HELD BY DELHI HIGH COURT ( 252 ITR 491, PNB FINANCE LTD. VS. CIT) THAT A PROPERTY IS A COMPREHENSIVE TERM IN DICATIVE OF EVERY POSSIBLE INTEREST WHICH A PARTY CAN HAVE. THE DEFINITION OF THE PROPERTY IS NOT CONFINED TO PHYSICAL PROPERTY. IT ALSO MEANS ANY RIGHT, TITLE O R INTEREST IN A PHYSICAL PROPERTY. EVEN A MORTGAGE OR A LESSEE MAY HAVE CERTAIN RIGHTS AND INTEREST IN A PHYSICAL PROPERTY. A TENANT MAY ALSO HAVE CERTAIN RIGHTS IN A PROPERTY RENTED BY HIM. LICENSE OBTAINED FOR MANUFACTURING A PRODUCT IS A PROPERTY. A RIGHT TO OBTAIN CONVEYANCE OF AN IMMOVABLE PROPERTY IS A CAPITAL ASSET. IN THE CA SE OF LEASEHOLD LAND, THE LEASEHOLD RIGHT WOULD BE A CAPITAL ASSET IN THE HANDS OF THE LESSEE (CIT VS. HINDUSTAN HOTELS LTD., 335 ITR 60, BOM). IF THE ABOVE DEFINITION OF PROPERTY IS CONSIDERED IN LIGHT OF THE FACTS OF THE PRESENT CASE, THE RESERVATION LETT ER RECEIVED BY THE ASSESSE IS A PROPERTY AS IT CAN BE SOLD OR PLEDGED FOR LOAN OR O N THE BASIS OF WHICH FINAL PROPERTY IS TO BE RECEIVED. (I) UNDER THE IT ACT, SHORT TERM CAPITAL ASSET MEANS A CAPITAL ASSET HELD BY AN ASSESSEE FOR NOT MORE THAN THIRTY SIX MONTHS IMMEDIATELY PRE CEDING THE DATE OF ITS TRANSFER. THE AO HAS GROSSLY ERRED IN EMPHASIZING UPON THE PH YSICAL POSSESSION OF THE PROPERTY. THE AO HAS FAILED TO APPRECIATE THAT CALC UTTA HIGH COURT IN THE CASE OF CIT VS. ALL INDIA TEA AND TRADING COMPANY LTD.(1979 ) 117 ITR 525 HAS HELD THAT THE WORDS HELD BY AN ASSESSEE INCLUDE PHYSICAL, A CTUAL, CONSTRUCTIVE AND ALSO 5 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA SYMBOLIC POSSESSION OF A PROPERTY OF ANY KIND. THE AO HAS FAILED TO APPRECIATE THE GENESIS OF CERTAIN RIGHTS IN THE PIECES OF LANDS UN DER CONSIDERATION. A CAREFUL READING OF THE EVENTS, ACTIONS, MOUS, AGREEMENTS, RESERVATI ON LETTER DATED 20-08-2007 AND THE ALLOTMENT LETTER DATED 10.12.2009 MAKES IT CLEA R THAT THE RIGHT OF THE ASSESSEE WAS CREATED AS A RESULT OF SURRENDER OF THE LAND BY THE ASSESSEE TO THE JDA AND NOTIFICATION ISSUED ON 27-10-2005 TO PROVIDE ADDITI ONAL COMPENSATION. THIS ASSURANCE WAS FINALIZED WHEN THE RESERVATION LETTER IS ISSUED ON 20-08-2007. THEREFORE, THE HOLDING PERIOD OF THE CAPITAL ASSET TRANSFERRED BY THE ASSESSEE HAS TO BE COUNTED FROM 20.08.2007 AND NOT FROM 21.07.2011 WHEN THE PHYSICAL POSSESSION OF THE PLOT WAS GIVEN TO THE ASSESSEE. (II) WE MAY SUBMIT THAT WHAT THE APPELLANT HAD RECEIVED WAS NOT AN OWNERSHIP OF FREEHOLD LAND, RATHER WHAT HE GOT WAS LEASEHOLD RIG HT IN THE LAND. IT MEANS THE APPELLANT GOT CERTAIN RIGHTS AS LESSEE IN THE LAND. CONSEQUENTLY, WHAT THE APPELLANT TRANSFERRED, IN TERMS OF SECTION 45 OF THE INCOME-T AX ACT, WAS HIS LEASEHOLD RIGHTS IN THE TWO PLOTS OF LAND. LEASEHOLD RIGHTS ARE CAPITAL ASSETS. THE APPELLANT GOT RIGHTS AS A LESSEE. THE GENESES OF THE LEASEHOLD RIGHTS CANNO T BE DELINKED FROM THE RESERVATION LETTER. IT IS REITERATED THAT THE SPECIFICATION OF THE PLOT NUMBERS, THE PHYSICAL POSSESSION AND THE ISSUANCE OF LEASE DEED ARE FURTH ER IMPROVEMENTS OF THE RIGHT BORNE OUT OF THE RESERVATION LETTER AND EACH IMPROV EMENT INCREASED THE VALUE OF THE RIGHT ACQUIRED AS A RESULT OF THE RESERVATION LETTE R. IT WAS A PROCESS OF MATURITY. THE PHYSICAL POSSESSION OF LAND WAS NOT A NEW AND INDEP ENDENT RIGHT. SIMILARLY, THE RECEIPT OF LEASE DEED ALSO DOES NOT CREATE A NEW RI GHT WHICH IS INDEPENDENT FROM THE RIGHT ACQUIRED BY THE APPELLANT AS A RESULT OF A RE SERVATION LETTER. THUS, THE HOLDING PERIOD OF THE RIGHT IN THE PROPERTY IS TO BE CONSID ERED FROM THE RESERVATION LETTER I.E. FROM 20-08-2007 ONLY. ON THIS BASIS THE HOLDING PER IOD OF THE CAPITAL ASSET WOULD BE MORE THAN 36 MONTHS AND THEREFORE THE GAIN IS TO BE ASSESSED AS LONG TERM CAPITAL GAIN AND NOT THE SHORT TERM CAPITAL GAIN AS ASSESSE D BY THE AO. (III) THE LD. CIT(A) HAS NOT APPRECIATED THE ABOVE CONTEN TION OF THE ASSESSEE AND HAS HELD THAT WHAT THE ASSESSEE SOLD ON 02.08.2011 IS T HE PLOT OF LAND WHICH WAS ACQUIRED BY HIM ON 21.07.2011. EVEN IF IT IS HELD T O BE SOLD IT IS THE RIGHT IN PLOT WHICH WAS RELINQUISHED AND EXCHANGED INTO THE PHYSI CAL PLOT ON 21.07.2011. THE RIGHT IN PLOT IS ACQUIRED ON 28.04.2007 WHEN THE RE SERVATION LETTER WAS ISSUED. THE DEFINITION OF TRANSFER U/S 2(47) INCLUDES EXCHANGE OR RELINQUISHMENT OF THE ASSET. THEREFORE, THE RIGHT IN THE PLOT WHICH WAS CONVERTE D INTO PHYSICAL PLOT HAS A HOLDING PERIOD OF MORE THAN THREE YEARS. THE VALUE OF THE R IGHT IS THE SAME AS IS AGREED TO BE TRANSFER BY THE ASSESSEE FOR WHICH SALE DEED IS EXE CUTED. THEREFORE, IN ANY CASE, WHAT ASSESSEE SOLD IS A LONG TERM CAPITAL ASSET AND THUS AO BE DIRECTED TO COMPUTE LONG TERM CAPITAL GAIN IN SALE OF THE PROPERTY UNDER CON SIDERATION. 3.1. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE IS N O ILLEGALITY INTO THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE TRANSFER OF PROPERTY HAD NOT TAKEN PLACE IN 6 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA THE YEAR 2007 AS CLAIMED BY THE ASSESSEE. IN FACT, IN THE YEAR 2007, THERE IS NO TRANSFER OF PROPERTY OR ANY RIGHT. 3.2. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND THAT THE LD. CIT (APPEALS) IN PARA 3.1.2. OF HIS ORDER HAS DECIDED THE ISSUE AS UNDER :- 3.1.2 (I) THE BRIEF FACTS OF THE CASE ARE THAT 19, 251 SQ. MTR, OF AGRICULTURE LAND AT VILLAGE JIROTA TEHSIL SANGANER, JAIPUR WAS ACQUIRED BY JDA AND THE JDA ALLOTTED DEVELOPED RESIDENTIAL LAND WHI CH WAS 15% OF THE ACQUIRED LAND TO THE OWNERS OF THE LAND AS A COMPEN SATION IN THE EARLIER YEARS, WHICH WAS SOLD IN THE FY 2005-06 RELEVANT TO THE AY 2006-07. SUBSEQUENTLY, THE URBAN DEVELOPMENT DEPARTMENT, GOV T. OF RAJASTHAN, VIDE NOTIFICATION DATED 27.10.2005, STATED THAT IN ADDIT ION TO 15% DEVELOPED LAND ALREADY ALLOTTED TO THE OWNERS OF SURRENDERED LAND, THE GOVT. HAS TAKEN A DECISION TO ALLOT ADDITIONAL 5% RESIDENTIAL LAND AN 5% COMMERCIAL LAND I.E. 10% ADDITIONAL LAND TO THE OWNERS WHO HAVE SURRENDE RED THEIR LAND AT VILLAGE JIROTA, TEHSIL SNGANER, JAIPUR. SUBSEQUENTLY, IN V IEW OF THE ABOVE REFERRED NOTIFICATION DATED 27.10.2005, THE JDA ISSUED RESER VATION LETTER DATED 20.08.2007, IN FAVOUR OF THE APPELLANT AS POA FOR 1 035 SQ. MTR. OF RESIDENTIAL LAND AND 962 SQ.MTR. COMMERCIAL LAND. FURTHER, VID E SEPARATE ALLOTMENT LETTERS DATED 10.12.2009, THE JDA ALLOTTED FOUR PLO TS OF COMMERCIAL LAND TO THE APPELLANT. NOW, IN THE ALLOTMENT LETTERS, THE AREA OF THE PLOTS AS WELL AS THEIR NUMBERS WERE SPECIFIED. THE POSSESSION OF THESE PL OTS WERE TO BE GIVEN BY THE JDA AFTER MAKING DEPOSIT OF CESS TO JDA BY THE APPELLANT. (II) VIDE TWO REGISTERED AGREEMENT TO SELL DATED 26.05 .2010, THE APPELLANT AGREED TO SALE THE TWO PLOTS FOR CONSIDER ATION OF RS. 59 LAC AND 52 LAC TO M/S GULMOHAR BUILD HOME PVT. LTD ( M/ S GULMOHAR). THE APPELLANT HAS RECEIVED PART PAYMENT OUT OF THE ABOVE SALE CONSIDERATION, HOWEVER, THE POSSESSION OF THE PLOTS WERE NOT HANDED OVER TO M/S GULMOHAR AS THE APPELLANT HAND NOT RECE IVED THE POSSESSION OF THE PLOTS FROM JDA. THE POSSESSION O F THE ABOVE PLOTS WAS HANDED OVER TO THE APPELLANT BY THE JDA ON 21.0 7.2011 AS IS EVIDENT FROM THE REGISTERED SALE DEEDS DATED 02.08. 2011 EXECUTED BY THE APPELLANT IN FAVOR OF M/S GULMOHAR. THE AO TRE ATED THE DATE OF ACQUISITION AS 21.07.2011 I.E. THE DATE ON WHICH PO SSESSION OF THE PLOTS WAS GIVEN BY THE JDA TO THE APPELLANT AND COMPUTED SHORT TERMS CAPITAL GAINS THEREOF AGAINST LONG TERM CAPITAL GAI NS CLAIMED BY THE APPELLANT 7 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA (III) DURING APPELLANT PROCEEDINGS, IT WAS ADMITTED BY TH E APPELLANT THAT THROUGH RESERVATION LETTER IT DID NOT RECEIVE OWNER SHIP OF FREEHOLD LAND, RATHER IT GOT LEASEHOLD RIGHT IN THE LAND I.E. THE APPELLANT GOT CERTAIN RIGHTS AS LESSEE IN THE LAND AND THE APPELLANT TRAN SFERRED, IN TERMS OF SECTION 45 OF THE INCOME-TAX ACT, ITS LEASEHOLD RIG HTS IN THE TWO PLOTS OF LAND AND LEASEHOLD RIGHTS IN LAND ARE NOTHING BU T ARE CAPITAL ASSETS. THE APPELLANT DID NOT GET ABSOLUTE OWNERSHIP RIGHT OVER THE LAND. THE APPELLANT GOT RIGHTS AS A LESSEE. THE GENESES OF T HE LEASEHOLD RIGHTS CANNOT BE DELINKED FROM THE RESERVATION LETTER. IT WAS REITERATED THAT THE SPECIFICATION OF THE PLOT NUMBERS, THE PHYSICAL POSSESSION AND THE ISSUANCE OF LEASE DEED ARE FURTHER IMPROVEMENTS OF THE RIGHT BORNE OUT OF THE AGREEMENT AND EACH IMPROVEMENT INCREASED THE VALUE OF THE RIGHT ACQUIRED AS A RESULT OF THE AGREEMENT AND IT WAS A PROCESS OF MATURITY. THE PHYSICAL POSSESSION OF LAND WAS NOT A NEW AND INDEPENDENT RIGHT. SIMILARLY, THE RECEIPT OF LEASE DEED ALSO DOES NOT CREATE A NEW RIGHT WHICH IS INDEPENDENT FROM THE RI GHT ACQUIRED BY THE APPELLANT AS A RESULT OF THE RESERVATION LETTER. I T WAS THE CONTENTION OF THE APPELLANT THAT THUS THE HOLDING PERIOD OF THE R IGHT IN THE PROPERTY IS TO BE CONSIDERED FROM THE RESERVATION LETTER I.E. F ROM 20.08.2007 ONLY AND ON THIS BASIS, THE HOLDING PERIOD OF THE CAPITA L ASSET WOULD BE MORE THAN 36 MONTHS AND THEREFORE THE GAIN IS TO BE ASSESSED AS LONG TERM CAPITAL GAIN AND NOT THE SHORT TERM CAPITAL GA IN AS ASSESSED BY THE AO. (IV) I HAVE DULLY CONSIDERED THE SUBMISSION OF THE APPEL LANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. THE ISSUE UNDER CONSIDERATION IS WHEN THE PLOTS WERE ACQUIRED BY TH E APPELLANT AND ON WHICH DATE THESE WERE SOLD. IN THE ASSESSMENT ORDE R, THE AO HAS TAKEN THE DATE OF ACQUISITION AS 21.07.2011 WHEREAS IT WAS THE CONTENTION OF THE APPELLANT THAT IT ACQUIRED CAPITA L ASSET THROUGH RESERVATION LETTER ISSUED BY JDA ON 20.08.2007. (V) DURING THE APPELLANT PROCEEDING, IT WAS THE CONTENT ION OF THE APPELLANT THAT VIDE RESERVATION LETTER 20.08.2007, IT GOT RIG HTS, WHICH ARE NOTHING BUT A CAPITAL ASSET IN VIEW OF THE DEFINITION OF CA PITAL ASSET AS DEFINED IN SECTION 2 (14) OF THE ACT AS CAPITAL ASSET MEA NS PROPERTY OF ANY KIND HOLD BY THE ASSESSEE AND IN VIEW OF THE TERMS OF THE RESERVATION LETTER, IT COULD SALE AND TRANSFER THE PLOTS ( CLAU SE NO. 11); IT COULD PLEDGE THE PLOTS WITH BANK / FINANCIAL INSTITUTION ETC. ( CLAUSE NO. 15) ALLOTTED TO ITS THROUGH THE ABOVE REFERRED RESERVAT ION LETTERS (S). THUS, THE RIGHT FOR ALLOTMENT OF PLOTS WAS ACQUIRED BY IT ON 20.08.2007 WHICH MAY BE CONSIDERED AS THE DATE OF ACQUISITION OF THE PLOTS SOLD BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION AS TH ROUGH THE RESERVATION LETTER IT GOT THE UNCONDITIONAL RIGHTS IN THE LAND UNDER CONSIDERATION. 8 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA (VI) THE ABOVE CONTENTION OF THE APPELLANT HAS BEEN CONS IDERED VERY CAREFULLY IN THE LIGHT OF THE MATERIAL PLACED ON RE CORD. IT IS NOTED THAT THE RESERVATION LETTER DATED 20.08.2007 WAS ISSUED IN THE NAME OF THE APPELLANT AS POWER OF ATTORNEY HOLDER ONLY AND NOT IN ITS OWN CAPACITY. FURTHER, ONLY THE AREA OF THE LAND TO BE ALLOTTED I N FUTURE WAS STATED IN THE SAID RESERVATION LETTER. THE LOCALITY AND THE EXACT LOCATION OF THE PLOTS TO BE ALLOTTED WERE NOT SPECIFIED THEREOF. TH E APPELLANT HAS TO DEPOSIT CERTAIN FEES TO THE JDA IN VIEW OF URBAN CE ILING LAWS AND ONLY THEREAFTER, THE PLOTS WOULD BE ALLOTTED TO THE APPE LLANT. IT WOULD BE APPROPRIATE TO REPRODUCED CLAUSE NO. 11 AND 15 OF T HE RESERVATION LETTER AS RELIED UPON BY THE APPELLANT AS UNDER: 11- BL VKJ{K.K I= DS VK/KKJ IJ MDR HKW[K.M DKS LJ DKJ@THOU CHEK FUXE@F'KM~~;WYM CSAD@LJDKJH _.KNK=H LALFKK@US' KUY GKMFLAX CSAD VFKOK FJTOZ CSAD }KJK EKU;RK IZKIR _.KNK=H LAL FKKVKSA DS IKL HKOU FUEKZ.K DS _.K DS FY, FXJOH@JGU J[KRK GS RKS TFOIZK DKS DKBZ VKIFK UGHA GKSXHA 15- VKOAVH }KJK HKWFE FO; DJUS IJ SRK }KJK HKW[K. M DK GLRKURJ.K T;IQJ FODKL IZKF/KDJ.K DS FU;EKSA DS VUQLKJ IZKF/KD J.K LS DJOKUK GKSXKA (VII) THUS, IT IS EVIDENT FROM THE ABOVE CLAUSES OF THE R ESERVATION LETTER THAT THE APPELLANT WAS ALLOWED TO SALE OR PLEDGE THE HKW[K.M OR THE PLOTS ALLOTTED SUBSEQUENTLY AND NOT THE RIGHT, TO SELL TH E RIGHTS, ACQUIRED BY THE APPELLANT THROUGH THE RESERVATION LETTERS. THE SE CLAUSES MADE REFERENCE TO THE HKW[K.M AND NOT TO THE RIGHTS IN THE PLOTS WHICH WERE GIVEN TO THE APPELLANT THROUGH THE RESERVATION LETT ER. IT IS FURTHER NOTED THAT VIDE ALLOTMENT LETTER DATED 10.12.2009, THE SP ECIFIC PLOTS WERE ALLOTTED TO THE APPELLANT BY THE JDA, STILL THE POS SESSION OF THE PLOTS WERE NOT GIVEN TO THE APPELLANT BY THE JDA. IT IS A LSO NOTED FROM THE AGREEMENT TO SELL DATED 26.05.2010 EXECUTED BETWE EN THE APPELLANT AND M/S GULMOHAR THAT POSSESSION OF THE PLOTS WAS S TILL NOT GIVEN TO THE APPELLANT BY THE JDA. IT IS EVIDENT FROM THE S ALE DEED DATED 02.08.2011 THAT THE POSSESSION OF THE PLOTS WERE GI VEN BY THE JDA TO THE APPELLANT ONLY ON 21.07.2011. IT IS PERTINENT T O MENTION HERE THAT VIDE REGISTERED SALE DEEDS DATED 02.08.2011, THE AP PELLANT HAS SOLD THE SPECIFIC PLOTS IN A PARTICULAR LOCALITY AND NOT THE RIGHT FOR ALLOTMENT OF PLOTS OF LAND WHICH WERE TO BE ALLOTTED TO IT FR EE OF COST BY THE JDA IN VIEW OF THE TERMS OF THE RESERVATION LETTERS. H AD THE APPELLANT SOLD THE RIGHTS ACQUIRED THROUGH THE RESERVATION LETTER DATED 20.08.2007, THEN THE POSITION MAY BE DIFFERENT. 9 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA (VIII) IT WAS THE CONTENTION OF THE APPELLANT THAT THROUGH THE RESERVATION LETTER, IT ACQUIRED RIGHTS IN THE LEASEHOLD LAND AS A LESSEE. I FAIL TO UNDERSTAND THAT HOW THESE LEASEHOLD RIGHTS COULD BE ACQUIRED BY THE APPELLANT AS A LESSEE IN THE ABSENCE OF A PIECE OF LAND. FOR ACQUIRING LEASEHOLD RIGHTS IN LAND, THE LAND MUST BE SPECIFIC AND IN EXISTENCE AS NO LEASEHOLD RIGHTS EXIST IN VACUUM. VIDE RESERVATI ON LETTER DATED 20.08.2007 IN THE CAPACITY OF POA, THE APPELLANT AC QUIRED RIGHTS FOR THE FUTURE ALLOTMENT OF PLOTS AND NOTHING MORE. ON A C AREFUL PERUSAL OF THE RESERVATION LETTER, IT IS NOTED THAT THROUGH THE SA ID LETTER, NO LEASEHOLD RIGHTS WERE GIVEN TO THE APPELLANT BY THE JDA, AS C LAIMED BY THE APPELLANT IN ITS WRITTEN SUBMISSIONS. IN FACT, IT COULD BE SEEN FROM THE ALLOTMENT LETTER DATED 10.12.2009 ISSUED BY THE JDA THAT THE PLOTS WERE, NOW LEASED TO THE APPELLANT FOR A PERIOD OF 9 9 YEARS. FURTHER, VIDE ALLOTMENT LETTER DATED 10.12.2009, THE PLOTS W ERE ALLOTTED TO THE APPELLANT IN ITS OWN CAPACITY AND STILL THE POSSESS ION OF THE PLOTS WAS GIVEN BY THE JDA TO THE APPELLANT ONLY ON 21.07.200 1. THUS IN VIEW OF THE PROVISIONS OF SECTION 2 (47) OF THE ACT, IT IS HELD THAT THE APPELLANT ACQUIRED THE PLOTS UNDER CONSIDERATION ON 21.07.201 1 ONLY AND NOT PRIOR TO THAT AND THUS THE AO WAS JUSTIFIED IN NOT TAKING THE DATE OF ACQUISITION OF PLOTS AS 20.08.2007 AS CLAIMED BY TH E APPELLANT. ACCORDINGLY, THIS GROUND OF APPEAL IS HEREBY REJECT ED. 3.2 GROUND OF APPEAL NO. 1 (II) : ADOPTING THE SALE VALUE OF THE PLOTS AS PER SECTION 50C, ON THE BASIS OF VALUE ASSESSED BY THE SUB-REGISTRAR ON THE DATE OF SALE (I.E. 02.08.2011) AS AGAINST THAT ON T HE DATE OF AGREEMENT (I.E. 26.05.2010), WHEN THE SALE CONSIDERATION WAS DETERM INED. 3.2.1. DETERMINATION : (I) THE BRIEF FACTS ARE THAT THE APPELLANT VIDE AGRE EMENTS TO SELL DATED 26.05.2010 WITH M/S GULMOHAR, AGREED TO SELL THE SP ECIFIC PLOTS UNDER CONSIDERATION TO M/S GULMOHAR FOR CONSIDERATION OF RS. 59 LAC AND RS. 52 LAC, AND RECEIVED PART PAYMENTS THEREOF AND THE BALANCE PAYMENTS WERE TO BE MADE BY M/S GULMOHAR AT THE TIME OF REGISTRY. IT W AS THE CONTENTION OF THE APPELLANT THAT THROUGH THE ABOVE AGREEMENTS TO SEL L, IT SOLD THE RIGHTS IN THE PLOTS ALLOTTED TO IT IN CONSEQUENCE OF THE RESERVAT ION LETTER DATED 28.04.2007. AS THE POSSESSION OF THESE PLOTS WERE GIVEN BY JDA TO THE APPELLANT ON 21.07.2011, THE APPELLANT IN PURSUANCE OF THE SAID AGREEMENT DATED 26.05.2010 SOLD NOTHING BUT THE RIGHT TO ALLOTMENT. HOWEVER, ACCORDING TO THE ASSESSING OFFICER, THE APPELLANT RECEIVED THE P OSSESSION OF THE PLOTS UNDER CONSIDERATION FROM JDA ON 21.07.2011 AND HANDED OVE R THE POSSESSION OF THESE PLOTS TO THE BUYER I.E. M/S GULMOHAR ON 02.08 .2011, THE SALE WAS 10 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA THEREFORE COMPLETED ON 02.08.2011. AS PER THE ASSE SSING OFFICER SALE AGREEMENT DATED 26.05.2010 IS A MERE AGREEMENT. FU LL PAYMENT IS NOT RECEIVED AND IT IS NOT A FINAL SALE DEED AND THEREF ORE THE VALUE AS PER THE STAMP AUTHORITIES ON THE DATE OF THE SALE DEED I.E. 02.08.2011 IS TO BE CONSIDERED FOR COMPUTING THE CAPITAL GAIN AND NOT 2 6.05.2010 AS CLAIMED BY THE APPELLANT. SINCE, THE SALE CONSIDERATION AS ST ATED IN THE AGREEMENTS TO SELL DATED 26.05.2010 IS LOWER THAN FIVE THE VALUE ADOPTED BY THE SUB REGISTRAR OF PROPERTIES FOR CHARGING STAMP DUTY AT THE TIME OF REGISTRATION OF SALE DEEDS I.E. 02.08.2011, THE ASSESSING OFFICER I NVOKED THE PROVISIONS OF SECTION 50C OF THE ACT AND HAS TAKEN THE SALE CONSI DERATION AT RS. 1,53,53,298/- AGAINST SALE CONSIDERATION OF RS. 1,2 2,85,000/- DECLARED BY THE APPELLANT IN THE SALE DEEDS. (II) DURING THE APPELLATE PROCEEDINGS, IT WAS SUBMITTED BY THE APPELLANT THAT IN ITS CASE THE PROPERTY VALUE WAS ASSESSED BY THE STAMP VALUATION AUTHORITY ON 26 TH MAY, 2010 I.E. ON THE DATE OF AGREEMENT TO SELL OF THE RIGHTS IN THE PROPERTY ITSELF. THERE WAS NO DIFFERENCE IN THE DE CLARED CONSIDERATION AND THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. TH E VALUATION WAS MADE AS AGREEMENT TO SELL WAS GOT REGISTERED WITH THE REG ISTERING AUTHORITY. THE AGREEMENT TO SELL WAS IRREVOCABLE. AS PER TERMS AND CONDITIONS LAID DOWN IN SERIAL NO. 6, THE BUYER WOULD HAVE FULL RIGHTS TO L EGALLY ENFORCE SPECIFIC COMPLIANCE/PERFORMANCE OF THE AGREEMENT INCLUDING F ORCIBLE REGISTRATION, THROUGH THE COURT OF LAW. IT WAS FURTHER SUBMITTED THAT ON CE THE PROPERTY IS ASSESSED BY THE STAMP VALUATION AUTHORITY IN CONNECTION WITH A TRANSACTION OF TRANSFER, THE VALUE SO ASSESSED SHOULD ONLY BE CONSIDERED FOR THE PURPOSE OF SECTION 50 C OF THE ACT. THE LAND IS SAME, THE BUYER IS SAME AND T HE CONSIDERATION IS SAME. THE CONSIDERATION WAS NOT FOUND TO BE LESS THAN THE VAL UE ASSESSED FOR THE FIRST TIME. (III) IT WAS FURTHER SUBMITTED THAT SECTION 50C WAS INTR ODUCED BY FINANCE ACT, 2012 W.E.F. 01.04.2003. SIMILAR TYPE OF SECTI ON I.E. SECTION 43C WAS INSERTED BY FINANCE ACT, 2013 W.E.F. 01.04.2014. SECTION 43 CA PROVIDES THAT WHERE THE DATE OF AGREEMENT FIXING THE VALUE OF CONSIDERATIO N FOR TRANSFER OF ASSETS AND THE DATE OF REGISTRATION OF SUCH TRANSFER OF ASSETS AR E NOT THE SAME, IN THAT CASE STAMP DUTY VALUE AS ON THE DATE OF THE AGREEMENT FI XING THE VALUE OF THE CONSIDERATION IS TO BE CONSIDERED. GOING BY THE C OROLLARY, THE ASSESSING OFFICER SHOULD HAVE TAKEN THE VALUE AS ASSESSED ON 26.05.20 10. IN THE CASE OF THE APPELLANT THE VALUE OF THE PROPERTY WAS DULY ASSESS ED ON 26.05.2010 AND THE STAMP DUTY WAS PAID ON THE BASIS OF THE VALUE SO AS SESSED. ANY ASSESSMENT MADE LATER ON, THEREFORE WOULD NOT BE RELEVANT FOR THE PURPOSE OF SECTION 50C OF THE ACT. SECTION 50C WAS INCORPORATED TO PREVENT LA RGE SCALE UNDER- VALUATION OF 11 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA THE PROPERTY IN THE SALE DEED AS TO DEFRAUD THE GOV ERNMENT OF REVENUE. IN THE CASE OF THE APPELLANT, THERE IS NO UNDER- VALUATION OF PROPERTY. (IV) IT WAS ALSO SUBMITTED THAT CONSIDERATION THE ANO MALY IN SECTION 43CA VIS A VIS SECTION 53C, A PROVISO IS INSERTED TO SEC TION 53C BY FINANCE ACT 2016 W.E.F. 01.04.2017 TO PROVIDE THAT WHERE THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR T RANSFER OF THE CAPITAL ASSETS ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSE SSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF THE CONSIDERATION FOR SUCH TRANSFER. THIS PROVISO IS TO REMOVE THE UNINTENDED HARDSHIP AND THEREFORE IT HAS A RETROSPECTIVE EFFECT IN VIEW OF THE PRINCIPLE LAID DOWN BY THE SUPREME COUR T IN CASE OF CIT V. ALOM EXTRUSIONS LIMITED 319 ITR 306. (V) I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPE LLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. IT IS AN UNDISP UTED FACT THAT THE AGREEMENT TO SELL DATED 26.05.2010 WERE REGISTERED WITH THE SUB REGISTRAR AND THERE WAS NO DIFFERENCE BETWEEN THE SALE CONSIDERATION AND THE V ALUE ASSESSED BY THE SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. HOWEVER, IT IS TO BE MENTIONED THAT VIDE THE SAID AGREEMENTS TO SELL DATED 26.05.2010, THE APPELLANT HAS TRANSFERRED ONLY THE RIGHTS IN THE SAID PLOTS AND NOT THE ABSOL UTE RIGHTS THEREON AS ON THE SAID DATE EVEN THE APPELLANT WAS NOT HAVING POSSESS ION OF THE SAID PLOTS. WHEREAS AS PER SALE DEEDS DATED 02.08.2011, THE APP ELLANT HAS TRANSFERRED THE PLOTS UNDER CONSIDERATION IN ABSOLUTE TERMS. IF TH E CONTENTION OF THE APPELLANT IS ACCEPTED , THE PLOTS WERE ALREADY TRANSFERRED ON 26 .05.2010 I.E. ON THE DATED OF EXECUTION OF AGREEMENT TO SELL THEN WHAT WAS THE NEED FOR FURTHER EXECUTING THE SALE DEEDS ON 02.08.2011. IT IS TO BE NOTED TH AT AS PER PROVISIONS OF SECTION 50C OF THE ACT, THE VALUE ASSESSED OR ADOPTED BY TH E SUB REGISTRAR FOR CHARGING OF STAMP DUTY OR THE SALE CONSIDERATION FOR SUCH TR ANSFER IS TO BE SEEN AND IN THE INSTANT CASE UNDER CONSIDERATION, THE TRANSFER TOOK PLACE ONLY ON 02.08.2011 I.E. THE DATE OF EXECUTION OF SALE DEEDS. THERE IS FALL ACY IN THE ARGUMENT OF THE APPELLANT THAT TRANSFER TOOK PLACE ON 26.05.2010 I. E. AT THE TIME OF AGREEMENT TO SELL AS IN VIEW OF THE PROVISIONS OF SECTION 2(47) OF THE ACT, THE TRANSFER IS COMPLETE IF THE PART PAYMENTS WERE MADE AND THE POS SESSION WAS GIVEN TO THE BUYER. HOWEVER, IN THE INSTANT CASE UNDER CONSIDERA TION, ON THE DATE OF EXECUTION OF AGREEMENT TO SELL I.E. 26.05.2010, T HE APPELLANT ITSELF WAS NOT HAVING THE POSSESSION OF THE PLOTS UNDER CONSIDERAT ION AND THUS THERE WAS NO QUESTION OF GIVING THE POSSESSION OF THE PLOTS TO T HE BUYERS I.E. M/S GULMOHAR ON 26.05.2010. (VI) THE APPELLANT RELIED ON THE PROVISIONS OF SECTION 43C OF THE ACT AND STATED THAT SECTION 43C PROVIDES THAT WHERE THE DAT E OF AGREEMENT FIXING THE 12 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA VALUE OF CONSIDERATION FOR TRANSFER OF ASSETS AND T HE DATE OF REGISTRATION OF SUCH TRANSFER OF ASSETS ARE NOT THE SAME, IN THAT CASE S TAMP DUTY VALUE AS ON THE DATE OF THE AGREEMENT FIXING THE VALUE OF THE CONSIDERAT ION IS TO BE CONSIDERED. (VII) I HAVE GONE THROUGH THE PROVISIONS OF SECTION 43CA OF THE ACT AND FOR THE SAKE OF CONVENIENCE, THE SAME IS REPRODUCED AS UNDER: 43CA. SPECIAL PROVISION FOR FULL VALUE OF CONSIDE RATION FOR TRANSFER OF ASSETS OTHER THAN CAPITAL ASSETS IN CERTAIN CASES-(1) WHER E THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF AN ASSET (OTHER THAN A CAPITAL ASSET), BEING LAND OR BUILDIN G OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTH ORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSES SABLE SHALL, FOR THE PURPOSES OF COMPUTING PROFITS AND GAINS FROM TRANSF ER OF SUCH ASSET, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RE CEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. (2) THE PROVISIONS OF SUB-SECTION (2) AND SUB-SECT ION (3) OF SECTION 50C SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO DETER MINATION OF THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE UNDER SUB-SECTION (1). (3) WHERE THE DATE OF AGREEMENT FIXING THE VALUE OF CONSIDERATION FOR TRANSFER OF THE ASSET AND THE DATE OF REGISTRATION OF SUCH TRANSFER OF ASSET ARE NOT THE SAME, THE VALUE REFERRED TO IN SUB-SECTION (1) MAY BE TAKEN AS THE VALUE ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERN MENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER O N THE DATE OF THE AGREEMENT. (4) THE PROVISIONS OF SUB-SECTION (3) SHALL APPLY O NLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION OR A PART THEREOF HAS BEEN RECEIVED BY ANY MODE OTHER THAN CASH ON OR BEFORE THE DATE OF AGREEMENT FOR TRANSFER OF THE ASSET.. (I) IT IS TO BE NOTED THAT THE SECTION 43C OF THE ACT D O NOT APPLY TO CAPITAL ASSETS AS ALREADY SPECIFIED IN THE SECTION ITSELF I .E. IT IS RELATED TO THE STOCK IN TRADE OR BUSINESS ASSETS. THUS, THIS CONT ENTION OF THE APPELLANT DESERVES TO BE REJECTED. (IX) IT WAS THE ANOTHER CONTENTION OF THE APPELLANT THA T A PROVISION IS INSERTED TO SECTION 53C BY FINANCE ACT 2016 W.E.F. 01.04.201 7 TO PROVIDE THAT WHERE 13 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDER ATION AND THE DATE OF REGISTRATION FOR TRANSFER OF THE CAPITAL ASSETS ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF THE CONSIDERATION FOR SUCH TRANSFER. THIS PROVISO IS TO REMOVE THE UNINTENDED HARDSHIP AND THEREFORE IT HAS A RETROSPECTIVE EFFEC T. (X) I HAVE DULY CONSIDERED THE ABOVE CONTENTION OF THE APPELLANT VERY CAREFULLY. IT IS NOTED THAT THE SECTION 50C OF THE ACT HAS BEEN AMENDED BY THE FINANCE BILL 2016 AND IS APPLICABLE W.E.F 01.04 .2017 I.E. FROM ASSESSMENT YEAR 2017-18 AND THUS IS NOT APPLICABLE TO THE INSTANT CASE UNDER CONSIDERATION AND THE SAID AMENDMENT HAS NOT BEEN MADE WITH RETROSPECTIVE EFFECT AS CLAIMED BY THE APPELLANT. IN FACT, SECTION 50C(1) OF THE ACT HAS BEEN AMENDED AND NOT THE PROVISO TO SEC TION 50C WAS INSERTED AS CLAIMED BY THE APPELLANT. IT IS TO BE NOTED THAT I N THE INSTANT CASE UNDER CONSIDERATION, THERE IS DIFFERENCE BETWEEN THE AGR EEMENT TO SELL DATED 26.05.2010 AND THE REGISTERED SALE DEEDS EXECUTED O N 02.08.2011. IN THE AGREEMENTS TO SELL, THE APPELLANT TRANSFERRED ITS RIGHTS IN THE PLOTS UNDER CONSIDERATION WITHOUT HAVING THE POSSESSION OF THE PLOTS WHEREAS IN THE SALE DEEDS NOT ONLY THE RIGHTS IN THE SAID PLOTS WERE TR ANSFERRED BUT ACTUALLY POSSESSION OF THE PLOTS WAS ALSO HANDED OVER BY THE APPELLANT TO THE BUYER OF THE PLOTS. FURTHER, IF THE CONTENTION OF THE APPEL LANT IS ACCEPTED THEN THE TRANSFER SHOULD HAVE TAKEN PLACE IN THE FINANCIAL Y EAR 2010-11 I.E. RELEVANT TO THE ASSESSMENT YEAR 2011-12, WHEREAS TH E APPELLANT ITSELF HAS CONSIDERED THE TRANSFER IN THE ASSESSMENT YEAR 2012 -13 I.E. THE YEAR UNDER CONSIDERATION MEANING THEREBY THE YEAR IN WHICH THE SALE DEEDS WERE EXECUTED. HENCE, THIS CONTENTION OF THE APPELLANT IS HEREBY REJECTED. 3.3. NOW FIRST, ISSUE TO BE DETERMINED IS THAT WHAT SHOULD BE THE HOLDING PERIOD FOR THE ASSESSEE IN RESPECT OF THE PROPERTY IN QUES TION. THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESEE TRANSFERRED THE RIGHT UNTO THE CAPITAL ASSET, WHICH WAS ACCRUED TO HIM WHEN JAIPUR DEVELOPMENT AUTHORITY (I N SHORT JDA) HAD ISSUED RESERVATION LETTER DATED 20/08/2007 AND NOT TO BE RECKONED FROM THE DATE WHEN THE ALLOTMENT LETTER DATED 20/12/2009 WAS ISSUED TO THE ASSESSEE. THE AUTHORITIES BELOW REJECTED THE CLAIM OF THE ASSESSEE ON THE GRO UND THAT NO SPECIFIC PROPERTY WAS 14 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA ALLOTTED. HENCE, THE PERIOD CANNOT BE FROM THE DAT E WHEN RESERVATION LETTER WAS ISSUED. THE RESERVATION LETTER MERELY STATED ABOUT THE RESERVING THE RIGHTS OF THE ASSESSEE UNTO A PIECE OF LAND ADMEASURING 962 SQUAR E MTRS. OF LAND TO THE ASSESSEE. BUT NO SPECIFIED PROPERTY WAS EARMARKED FOR SUCH PU RPOSE. THEREFORE, IN THE LIGHT OF THE PROVISIONS OF INCOME TAX ACT, THE ASSESSEE C ANNOT BE TERMED AS HAVING ANY RIGHT IN THE CAPITAL ASSET IN QUESTION. IT WAS ONL Y WHEN THE JDA ISSUED ALLOTMENT LETTER DATED 10/12/2009, WHEREBY THE JDA ALLOTTED P LOTS OF COMMERCIAL LAND TO THE ASSESSEE. THE ALLOTMENT LETTER GAVE THE SPECIFIC N UMBER AND EARMARKED THIS SPECIFIC PROPERTY TO THE ASSESSEE. THEREFORE, IT CAN NOT BE CONFERMENT OF THE RIGHTS INTO THE PROPERTY WHICH WAS ONLY CRYSTALLIZED VIDE ALLOTMENT LETTER DATED 10/12/2009. 3.4. IT IS THE CONTENTION OF THE ASSESSEE THAT THE TERM CAPITAL ASSET HAS A VERY WIDE IMPORT. THE ASSESSING OFFICER HAS NARROWED DO WN ITS MEANING IN AS MUCH AS HE HAS GIVEN UNDUE SIGNIFICANCE TO THE PHYSICAL POS SESSION OF THE PROPERTY. HE FAILED TO APPRECIATE THAT ANY RIGHT OF AN ASSESSEE WHICH C AN BE LAWFULLY EXERCISED IS ALSO A PROPERTY UNDER SECTION 45 OF THE ACT, EVEN A BENEFI CIAL RIGHT OR A THING CONSIDERED AS HAVING A MONEY VALUE IS A PROPERTY. IT IS AN ES TABLISHED LAW THAT THE WORD PROPERTY SHOULD BE GIVEN LIBERAL AND WIDE CONNOTATI ON. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT RENDER ED IN THE CASE OF PNB FINANCE LTD. VS. CIT, 252 ITR 291 (DEL.) THAT THE PROPERTY IS A COMPREHENSIVE TERM NEGATIVE OF EVERY POSSIBLE INTEREST WHICH A PARTY CAN HAVE. FURTHER, RELIANCE IS PLACED ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. HINDUSTAN HOTELS LTD., 335 ITR 60 (BOMBAY). 3.5. THE LD. COUNSEL URGES THAT SINCE BY WAY OF RES ERVATION LETTER DATED 20/08/2007 THERE WAS A CONTRACT IN THE TERM OF ASSU RANCE BY THE JDA, THIS ASSURANCE 15 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA GAVE RIGHT TO THE ASSESSEE INTO THE CAPITAL ASSET. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND THE CASE LAWS RELIED ON BY TH E LD. COUNSEL FOR THE ASSESSEE. THE HONBLE DELHI HIGH COURT IN THE CASE OF PNB FI NANCE LTD. VS. CIT (SUPRA) HELD AS UNDER :- THE ALL INCLUSIVE DEFINITION OF THE TERM CAPITAL ASSET BRINGS WITHIN ITS AMBIT PROPERTY OF ANY KIND HELD BY THE ASSESSEE, EX CEPT WHAT HAS BEEN EXPRESSLY EXCLUDED BY CLAUSES (I) TO (IV) THEREUNDE R. THUS, THE EXPRESSION CAPITAL ASSET HAS A WIDE CONNOTATION. BUT FOR TH E EXEMPTIONS STATUTORILY PROVIDED, THE EXEMPTED PROPERTIES WOULD ALSO OTHERW ISE FALL WITHIN THE DENIED MEANING. THE TERM PROPERTY, THOUGH HAS NOT STATU TORY MEANING BUT IS OF WIDEST IMPORT AND SUBJECT TO ANY LIMITATIONS WHICH THE CONTEXT MAY REQUIRE, IT SIGNIFIES EVERY POSSIBLE INTEREST WHICH A PERSON CA N ACQUIRE, HOLD OR ENJOY (SEE AHMED G.H ARIFF V. CWT(1970) 76 ITR 471 (SC). ACCORDING TO STROUDS JUDICIAL DICTIONARY OF WORDS AND PHRASES (SIXTH EDI TION), PROPERTY IS A COMPREHENSIVE TERM INDICATIVE OF EVERY POSSIBLE INT EREST WHICH A PARTY CAN HAVE. IN RUSTOM CAVAJEE COOPERS CASE (1970) 40 CO MP CAS 325 (SC), IT WAS ALSO OBSERVED THAT THE EXPRESSION PROPERTY HAS A WIDE CONNOTATION AND ( PAGE 354) IT INCLUDES NOT ONLY ASSETS, BUT THE OR GANIZATION, LIABILITIES AND OBLIGATIONS OF A GOING CONCERN AS A UNIT. IN VIEW OF THE WIDE MEANING OF A EXPRESSION CAPITAL ASSET IN SECTION 2 (14) OF THE A CT AND PROPERTY AS UNDERSTOOD IN ITS ORDINARY WIDE CONNOTATION, WE HAV E NO HESITATION IN HOLDING THAT THE BUSINESS UNDERTAKING OF THE ASSESSEE WAS A CAPITAL ASSET. IN FACT, LEARNED COUNSEL FOR THE ASSESSEE DID NOT DISPUTE BE FORE US THAT THE UNDERTAKING OF THE ASSESSEE WAS A CAPITAL ASSET WITH IN THE MEANING OF SECTION 2 (14) OF THE ACT. THE QUESTION IS, ACCORD INGLY, ANSWERED IN THE AFFIRMATIVE. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . HINDUSTAN HOTELS LTD. (SUPRA) HELD AS UNDER :- IN OUR VIEW WHETHER THE CONSTRUCTION OF THE BUILD ING HAS BEEN COMPLETED OR NOT WOULD ALSO NOT MAKE ANY DIFFERENCE . IT IS WELL SETTLED BY NOW THAT, UNLIKE IN ENGLAND, IN INDIA, THE CONCEPT OF DUAL OWNERSHIP IS RECOGNIZED IN THAT SENSE THAT THE LAND MAY BELONG T O ONE PERSON AND THE BUILDING STANDING THEREON MAY BELONG TO ANOTHER. R EFERENCE MAY BE MADE IN THAT CONNECTION TO THE DECISION OF THE SUPREME COUR T IN DR. K.A. DHAIRYAWAN V. J.R THAKUR, AIR 1958 SC 789 AND A DECISION OF TH E DIVISION BENCH OF THIS COURT IN CIT V. FAZALBHOY INVESTMENT CO. P. LTD. (1 977) 109 ITR 802 (BOM). ONCE THE CONCEPT OF DUAL OWNERSHIP IS ACCEPTED IT M ATTERS NOT WHETHER THE CONSTRUCTION OF A BUILDING IS COMPLETED OR NOT. IT ALSO MATTERS NOT WHETHER 16 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA THE BUILDING IS CONSTRUCTED BY THE OWNER OF THE LAN D OR BY SOMEBODY ELSE. IN THE CASE OF A LEASEHOLD LAND, THE LEASEHOLD RIGHT W OULD ALSO BE A CAPITAL ASSET UNDER SECTION 2 (14) OF THE INCOME-TAX ACT IN THE H ANDS OF THE LESSEE. IN A GIVEN CASE THE OWNER OF THE LAND AND THE OWNER OF T HE BUILDING MAY BE THE SAME PERSON BUT THAT DOES NOT MEAN THAT THE TWO ASS ETS MERGE MERELY BECAUSE THEY ARE OWNED BY THE SAME PERSON. THE CAPI TAL GAIN ARISING OUT OF THE SALE OF THE LAND OF THE BUILDING CAN AND WOULD BE REQUIRED TO BE BIFURCATED, A GAIN ARISING OUT OF THE SALE OF LAND AND A GAIN ARISING OUT OF SUPER STRUCTURE WHETHER THE BUILDING IS COMPLETE OR NOT. CONSEQUENTLY, WE ARE OF THE VIEW THAT THE TRIBUNAL WAS RIGHT IN HOLD ING THAT THE CAPITAL GAIN ARISING OUT OF THE SALE THE LEASEHOLD INTEREST IN T HE LAND AND INCOMPLETE BUILDING WILL HAVE REQUIRED TO BE BIFURCATED INTO T HE GAIN ARISING OUT OF A SALE OF LEASEHOLD INTEREST IN THE LAND AND THE SALE OF T HE INCOMPLETE BUILDING. QUESTION (A) IS THEREFORE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THE LIGHT OF THE ABOVE CASE LAWS, THE TERM PROPE RTY NEEDS TO BE GIVEN A WIDE IMPORT. THE LD. CIT(A) HAS NOTED THAT THE RESERVATI ON LETTER CONFERRED RIGHTS ON THE ASSESSEE BUT SUCH RIGHTS WERE IN THE CAPACITY OF PO WER OF ATTORNEY. THE LD. CIT(A) FURTHER OBSERVED THAT THERE WAS NO SPECIFIC PROPERT Y HENCE, THE RIGHTS WERE NOT ENFORCEABLE AT THAT POINT OF TIME. WE DO NOT CONCUR WITH THE TWO OBJECTIONS OF LD. CIT (A) IN VIEW THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF PNB FINANCE LTD. VS CIT (SUPRA). HOWEVER, WE FIND THAT THE RIGHTS CONFERRED VIDE RESERVATION LETTER DATED 20/08/2007 WERE CONDI TIONAL, THERE IS NO FINDING IN THIS RESPECT. AS PER THE INDIAN CONTRACT ACT, 1872 A CON TRACT WOULD NOT BE AN AGREEMENT UNLESS THE OTHER PARTY ACCEPTS THE OFFER OF THE OT HER PARTY. IN THE PRESENT CASE THE RESERVATION LETTER WAS UTMOST AN OFFER BY THE JDA TO THE ASSESSEE SUBJECT TO CERTAIN CONDITIONS. IT IS NOT CLEAR FROM MATERIAL PLACED BEFORE US AS TO WHEN THE ASSESSEE PERFORMED THE REQUIREMENTS AS LAID DOWN INTO THE CO NDITIONS. IN OUR CONSIDERED VIEW THE ASSESSEE COULD CLAIM THE RIGHTS FROM THE DATE, WHEN HE FULFILLED THE CONDITIONS. FOR EXAMPLE, IF AN INDIVIDUAL IS OFFERED SOMETHING SUBJECT TO CERTAIN CONDITIONS, AND 17 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA IF THE CONDITIONS ARE NOT FULFILLED THE CONTRACT FA ILS FOR WANT OF ACCEPTANCE. THEREFORE, WE RESTORE THE ISSUE TO THE FILE OF THE AO FOR VERIFICATION. THE AO IS HEREBY DIRECTED TO VERIFY AS TO WHEN THE ASSESSEE C OMPLIED WITH THE CONDITIONS EMBODIED INTO THE RESERVATION LETTER DATED 20/08/20 07. THEREAFTER, THE AO WOULD DECIDE THE ISSUE AFRESH IN THE LIGHT OF ABOVE DISCU SSION. THIS GROUND NO.(1) (I) AND (II) ARE ALLOWED FOR STATISTICAL PURPOSE. 4. GROUND NO. (1)(III) IS AGAINST ADOPTING THE SALE PRICE OF THE PLOT AS PER SECTION 50C OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE R EITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. THE SUBMISSION OF THE A SSESSEE ARE REPRODUCED AS UNDER:- 3. IN RESPECT OF THE SECOND ISSUE I.E. WHAT SHOULD BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUED AS A RESULT OF TRANSFER VIS-A-V IS SECTION 50C OF THE ACT, WE ARE TO SUBMIT AS UNDER:- (I) THE AO CONSIDERED THE FULL VALUE OF CONSIDERATION O F THE TWO PLOTS AT RS.74,78,100/- AND RS.66,81,150/- RESPECTIVELY AS A GAINST THE ACTUAL CONSIDERATION OF RS.59 LACS AND RS.52 LACS RESPECTI VELY U/S 50C FOR COMPUTING THE CAPITAL GAIN BY HOLDING THAT THE SALE AGREEMENT DATED 26.05.2010 IS A MERE AGREEMENT, FULL PAYMENT IS NOT RECEIVED, IT IS NOT A FINAL SALE DEED AND THEREFORE, THE VALUE AS PER THE STAMP AUTHORITIES ON THE DATE OF THE EXECUTION OF THE SALE DEED IS TO BE CONSIDERED U/S 50C FOR COMPUTING THE CAPITAL GAIN. (II) IT IS SUBMITTED THAT THE AO ERRED IN NOT CORRECTLY APPRECIATING THE INTENT OF THE PROVISIONS OF SECTION 50C OF THE ACT IN THE CONTEXT OF THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. SECTION 50C HAS TWO IMPORTANT FEATURES. FIRSTLY, IT SPEAKS ABOUT THE CONSIDERATIO N RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER. SECONDLY, IT SPEAKS ABOUT T HE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY. IF TH E DECLARED CONSIDERATION IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY, THEN FOR THE PURPOSES OF SECTION 48, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL BE DEEMED TO BE FULL VALUE OF T HE CONSIDERATION. (III) IN THE PRESENT CASE, THE VALUE OF THE PROPERTY WA S ASSESSED BY THE STAMP VALUATION AUTHORITY ON 26 TH MAY, 2010 WHEN THE AGREEMENT TO SALE IS REGISTERED. THERE IS NO DIFFERENCE IN THE DECLARED CONSIDERATION AND THE VA LUE ADOPTED BY THE STAMP VALUATION AUTHORITY ON THIS DATE. THE AGREEMENT TO SALE WAS IRREVOCABLE. AS PER TERMS AND CONDITIONS LAID DOWN IN SERIAL NO. 6, THE BUYER WOULD HAVE FULL RIGHTS TO LEGALLY ENFORCE SPECIFIC COMPLIANCE/PERFORMANCE OF THE AGRE EMENT INCLUDING FORCIBLE 18 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA REGISTRATION, THROUGH THE COURT OF LAW. THUS, ONCE THE PROPERTY IS ASSESSED BY THE STAMP VALUATION AUTHORITY, THE SAME HAS TO BE CONSI DERED FOR THE PURPOSE OF SECTION 50C OF THE ACT IN AS MUCH AS THE PROPERTY IS THE SA ME, BUYER IS SAME AND THE CONSIDERATION IS SAME. THE CONSIDERATION WAS NOT FO UND TO BE LOWER THAN THE VALUE ASSESSED AT THE FIRST INSTANCE. THEREFORE, THE SAME CANNOT BE IGNORED FOR COMPUTING THE CAPITAL GAIN U/S 50C. (IV) IT IS SUBMITTED THAT FA, 2016 HAS INSERTED A PROVIS O TO SECTION 50C W.E.F. 01.04.2017 WHICH READS AS UNDER:- PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXI NG THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF TH E CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAM P VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPU TING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART THEREOF, HAS BEEN RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELE CTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEM ENT FOR TRANSFER. THIS AMENDMENT WAS EXPLAINED IN MEMORANDUM EXPLAINI NG THE PROVISIONS OF FINANCE BILL, 2016 AS FOLLOWS:- RATIONALIZATION OF SECTION 50C IN CASE SALE CONSID ERATION IS FIXED UNDER AGREEMENT EXECUTED PRIOR TO THE DATE OF REGISTRATION OF IMMOV ABLE PROPERTY UNDER THE EXISTING PROVISIONS CONTAINED IN SECTION 50C, IN CASE OF TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING ON BOTH, THE V ALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMEN T OF STAMP DUTY SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF CAPITAL GAINS. THE INCOME TAX SIMPLIFICATION COMMITTEE (EASWAR COMMITT EE) HAS IN ITS FIRST REPORT, POINTED OUT THAT THIS PROVISION DOES NOT PROVIDE AN Y RELIEF WHERE THE SELLER HAS ENTERED INTO AN AGREEMENT TO SELL THE PROPERTY MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMOVABLE PROPERTY AND THE SALE CON SIDERATION IS FIXED IN SUCH AGREEMENT, WHEREAS SIMILAR PROVISION EXISTS IN SECT ION 43CA OF THE ACT I.E. WHEN AN IMMOVABLE PROPERTY IS SOLD AS A STOCK-IN-TRADE. IT IS PROPOSED TO AMEND THE PROVISIONS OF SECTION 50C SO AS TO PROVIDE THAT WHE RE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROPERTY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DU TY VALUE ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTIN G THE FULL VALUE OF CONSIDERATION. IT IS FURTHER PROPOSED TO PROVIDE TH AT THIS PROVISION SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION REFERRED T O THEREIN, OR A PART THEREOF, HAS BEEN PAID BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCO UNT PAYEE BANK DRAFT OR USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPER TY. THUS, THE GOVERNMENT RECOGNIZED THE GENUINE AND UNI NTENDED HARDSHIP TO THE ASSESSEE WHERE THE DATE OF AGREEMENT TO SALE IS PRI OR TO THE DATE OF SALE AND BETWEEN 19 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA THERE IS A VARIATION IN THE VALUE ASSESSABLE /ASSES SED IN RESPECT OF A PROPERTY BY THE STAMP VALUATION AUTHORITIES. ACCORDINGLY, THIS AMEN DMENT WHICH IS TO INTENDED TO REMOVE UNINTENDED AND UNDUE HARDSHIP SHOULD BE GIVEN RETRO SPECTIVE EFFECT. IN THIS CONNECTION RELIANCE IS PLACED ON THE FOLLOWING CASE S:- CIT VS. VATIKA TOWNSHIP PVT. LTD. 367 ITR 466/ 109 DTR 33 (SC) THE SUPREME COURT AT PARA 32 & 33 HELD THAT LEGISLA TIONS WHICH MODIFY ACCRUED RIGHTS OR WHICH IMPOSE OBLIGATIONS OR IMPOSE NEW DU TIES OR ATTACH A NEW DISABILITY HAVE TO BE TREATED AS PROSPECTIVE UNLESS THE LEGISL ATIVE INTENT IS CLEARLY TO GIVE THE ENACTMENT A RETROSPECTIVE EFFECT. HOWEVER, IF LEGIS LATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CORRESPONDING DETR IMENT ON SOME OTHER PERSON OR ON THE PUBLIC GENERALLY AND WHERE TO CONFER SUCH BENEF IT APPEARS TO HAVE BEEN THE LEGISLATORS OBJECT, THEN THE PRESUMPTION WOULD BE T HAT SUCH LEGISLATION, GIVING IT A PURPOSIVE CONSTRUCTION, WOULD WARRANT IT TO BE GIVE N A RETROSPECTIVE EFFECT . ALLIED MOTORS PVT. LTD. VS. CIT 224 ITR 677 (SC) THIS CASE RELATES TO SECTION 43B, WHICH WAS INSERTE D IN THE STATUTE BOOK FROM 01.04.84. THE PROVISO WAS ADDED W.E.F. 01.04.88. IT WAS HELD THAT PROVISO IS INSERTED TO REMOVE UNINTENDED CONSEQUENCES AND THEREFORE HAS A RETROSPECTIVE EFFECT. THE APEX COURT AT PAGE 686 HELD AS UNDER:- THE RULE OF REASONABLE CONSTRUCTION MUST BE APPLIE D WHILE CONSTRUING A STATUTE. LITERAL CONSTRUCTION SHOULD BE AVOIDED IF IT DEFEAT S THE MANIFEST OBJECT AND PURPOSE OF THE ACT. A PROVISO WHICH IS INSERTED TO REMEDY U NINTENDED CONSEQUENCES AND TO MAKE THE PROVISION WORKABLE, A PROVISO WHICH SUPPLI ES AN OBVIOUS OMISSION IN THE SECTION AND IS REQUIRED TO BE READ INTO THE SECTION , TO GIVE THE SECTION A REASONABLE INTERPRETATION, REQUIRES TO BE TREATED AS RETROSPEC TIVE IN OPERATION, SO THAT A REASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTI ON AS A WHOLE. CIT VS. ALOM EXTRUSIONS LTD. 319 ITR 306 (SC) RELAXATION ALLOWED BY FIRST PROVISO TO S. 43B WAS R ESTRICTED ONLY TO TAX, DUTY, CESS AND FEE, AND DID NOT APPLY TO CONTRIBUTIONS TO LABO UR WELFARE FUNDS. SINCE THE SECOND PROVISO RESULTED IN IMPLEMENTATION PROBLEMS, IT WAS DELETED BY FINANCE ACT, 2003, THEREBY EQUATING TAX, DUTY, CESS AND FEE WITH CONTR IBUTIONS TO WELFARE FUNDS. THUS, OMISSION OF SECOND PROVISO AND THE CORRESPONDING AM ENDMENT OF FIRST PROVISO BY FINANCE ACT, 2003, ARE CURATIVE IN NATURE AND ARE E FFECTIVE RETROSPECTIVELY W.E.F. 1ST APRIL, 1988, I.E., THE DATE OF INSERTION OF FIRST P ROVISO. IF THE CONTENTION OF THE DEPARTMENT THAT THE AMENDMENTS ARE EFFECTIVE PROSPE CTIVELY IS ACCEPTED, IT WOULD CAUSE HARDSHIP AND INDIVIOUS DISCRIMINATION AMONG T HE ASSESSEES. (V) CONSIDERING THE SAME, HONBLE ITAT, AHMEDABAD BENCH IN CASE OF DHARAMSHIBHAI SONANI VS. ACIT (2016) 142 DTR 62 (PB 10-16) HELD THAT AMENDMENT TO SEC. 50C BY INSERTING PROVISOS VIDE FI NANCE ACT, 2016 W.E.F. 01.04.2017 HAS BEEN MADE TO REMOVE AN APPARENT INCO NGRUITY WHICH RESULTED IN UNDUE HARDSHIPS TO THE TAXPAYERS. HENCE, SUCH AN AM ENDMENT HAS TO BE TREATED AS EFFECTIVE FROM THE DATE ON WHICH THE LAW CONTAINING SUCH AN UNDUE HARDSHIP OR INCONGRUITY WAS INTRODUCED. THUS, PROVISO TO SEC. 5 0C SHOULD BE TREATED AS CURATIVE IN NATURE AND APPLICABLE WITH RETROSPECTIVE EFFECT FROM 01.04.2003, I.E. THE DATE FROM WHICH SEC. 50C WAS INTRODUCED. 20 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA (VI) IN VIEW OF ABOVE, THE LOWER AUTHORITIES WERE NOT JU STIFIED IN SUBSTITUTING THE SALE CONSIDERATION U/S 50C IN RESPECT OF THE TWO PLOTS I .E. BC-29 & BC-26 AT RS.1,41,59,250/- AS AGAINST THE ACTUAL CONSIDERATIO N AT RS.1,11,00,000/- WHICH IS ALSO THE VALUE ADOPTED/ASSESSED BY THE STAMP AUTHORITIES ON THE DATE OF THE AGREEMENT DATED 26-05-2010. THEREFORE, THE ADDITION TO THE EX TENT OF RS.30,59,250/- BE DIRECTED TO BE DELETED. (VII) WITHOUT PREJUDICE TO ABOVE, WHAT THE ASSESSEE TRANS FERRED IS THE LEASEHOLD RIGHT IN THE PLOT ALLOTTED TO HIM THROUGH RESERVATION LETTER DT. 28.04.2007. SECTION 50C IS APPLICABLE ONLY WHEN THE CAPITAL ASSET IS LAND OR B UILDING OR BOTH. THEREFORE, SECTION 50C CANNOT BE INVOKED TO COMPUTE CAPITAL GAIN ARISI NG ON TRANSFER OF THE LEASEHOLD RIGHTS EVEN WHEN THE LAND IS ACQUIRED ON 99 YEARS L AND. FOR THIS RELIANCE IS PLACED ON THE DECISION OF MUMBAI ITAT IN CASE OF FARID GULMOHAMED VS. ITO(IT) (2016) 46 CCH 300 (PB 17-24) WHERE IT WAS HELD THAT SECTION 50C COULD NOT BE IN VOKED TO COMPUTER CAPITAL GAIN ARISING ON TRANSFER OF LEASEH OLD RIGHTS. 4.1. ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATI VE OPPOSED THE SUBMISSION AND SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 4.2. SINCE WE HAVE RESTORED THE ISSUE TO THE ASSESS ING OFFICER, WHETHER THE CAPITAL ASSET IS A LONG-TERM CAPITAL ASSET OR SHORT-TERM CA PITAL ASSET FOR DECISION AFRESH, THIS GROUND IS ALSO RESTORED TO THE AO FOR AFRESH CONSID ERATION AFTER ADJUDICATING UPON THE ISSUE WHETHER CAPITAL ASSET IS A SHORT-TERM CAP ITAL ASSET OR LONG TERM CAPITAL ASSET IN TERMS OF OUR DECISION ON GROUND NO. 1(I) & (II). GROUND NO. 1 (III) IS ALLOWED FOR STATISTICAL PURPOSE. 5. GROUND NO. 1(IV) IS AGAINST NOT GIVING BENEFIT O F INDEXATION FOR COST OF IMPROVEMENT. THE LD. COUNSEL OF THE ASSESSEE REITE RATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. 5.1. ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THERE IS NO ILLEGALITY INTO THE ORDER OF THE LD. CIT (APPEALS). THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CLAIM OF THE ASSE SSEE HAS BEEN RIGHTLY REJECTED BY THE LD. CIT (A). 21 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA 5.2. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. SINCE, WE HAVE RESTORED THE ISSUE TO THE ASSESSING OFFICER WHETHER THE CAPITAL ASSET IS A LONG TERM CAPITAL ASSET OR SHORT-TERM CAPITAL ASSET FOR DECISION AFRESH. THIS GROUND IS ALSO RESTORED TO AO FOR AFRESH CONSIDERATION AFTER ADJUDICATING UPON THE IS SUE WHETHER CAPITAL ASSET IS A SHORTTERM CAPITAL ASSET OR LONG-TERM CAPITAL ASSET IN TERMS OF OUR DECISION ON GROUND NO. 1(I) & (II). 6. GROUND NO. 1(V) IS AGAINST NOT ALLOWING THE EXEM PTION UNDER SECTION 54F OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS REIT ERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. HE SUBMITTED THAT THE LOWER AUTH ORITIES DID NOT ALLOW THE DEDUCTION, ACCORDING TO THEM THE CAPITAL ASSETS TRA NSFERRED IS A SHORT TERM CAPITAL ASSET. HOWEVER, AS MENTIONED IN PARA 2 ABOVE THE P ROPERTY TRANSFERRED IS A LONG TERM CAPITAL ASSET. THEREFORE, THE AO BE DIRECTED TO ALLOW THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. 6.1. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESEN TATIVE OPPOSED THE SUBMISSIONS AND SUBMITTED THAT THE AUTHORITIES BELO W HAVE RIGHTLY REJECTED THE CLAIM OF THE ASSESSEE THAT THE CAPITAL ASSET OF TRANSFERR ED WAS A LONG TERM CAPITAL ASSET. 6.2. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. SINCE WE HAVE RESTORED THE ISSUE TO THE ASSESSING OFFICER WHETHER THE CAPITAL ASSET IS A LONG-TERM CAPITAL ASSET OR SHORT TERM CAPITAL ASSET FOR DECISION AFRESH, TH IS GROUND IS ALSO RESTORED TO THE AO FOR AFRESH CONSIDERATION AFTER ADJUDICATING UPON TH E ISSUE WHETHER CAPITAL ASSET IS A SHORT-TERM CAPITAL OR LONG-TERM CAPITAL ASSET IN TE RMS OF OUR DECISION ON GROUND NO. 1(I) & (II). 22 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA THUS, ALL THE GROUNDS OF THE ASSESSEES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28.0 2.2017 SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 28/02/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI GIRISH BHUTRA, JAIPUR. 2. THE RESPONDENT ITO WARD 2(1), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 926/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 23 ITA NO. 926/JP/2016 SHRI GIRISH BHUTRA