D.PRASAN CHAND,CHENNAI vs. ITO NCR 5(4), CHENNAI

आदेश / O R D E R

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

1. Order of re-assessment u/s 143(3)/147 dt.15-3-2016 is illegal void and without jurisdiction in as much as the AO did not pass a separate speaking over to appellant’s objection to reopening and to drop it. 2.1 Authorities below failed to appreciate that provisions of Sec.50C cannot be invoked to the facts of the appellant’s cases in as much the sale agreement was dt.31-7-2008 which was before to the amendment to the above section from 1-10-2009. 2.2 CIT (A) erred in confirming the addition on the ground that the agreement of sale was not registered but failed to appreciate that in respect of an unregistered agreement of sale, prior to 1-10-2009, Sec.50C has no application. 2.3 He erred in confirming the addition for want of details of advance paid/further payments, while the bank A/c filed before him indicate the dates on which appellant received the consideration i.e., `25 lakhs on 4-7-2008 and `9,50,000/- on 2-8-2008 and he failed to appreciate that the other 2 remarks by him cannot be a reason for rejecting the ground that Sec.50C itself cannot be invoked in this case.

Out of which the assessee is said to be received `34,50,000/- from the purchaser Smt. Prabitha. As per sale deed, the market value of the property was `92,70,450/-. Hence, the assessment was reopened and the AO considered the short term capital gains on proportionate market value of sale of assessee’s share of land at `25,64,689/-. The assessee pleaded before the lower authorities that the said land was purchased by the assessee in the financial year 2007-08 and the same was shown at `27.10 lakhs and the said property was sold to Smt. Prabitha for a sale consideration of `34,50,000/- and the assessee had received the entire sale consideration of `25 lakhs on 04.07.2008 and `9.5 lakhs on 02.08.2008 totaling of `34,50,000/- through a sale agreement dated 31.07.2008. Further, it was submitted that the said payment of `34,50,000/- was received through bank account. The possession was handed over to the power holder and the assessee has no connection either with the agent or with the buyer of the said property. As such, the value of property u/s.50C cannot be brought to tax in the hands of assessee by invoking the provisions of the section 50C of the Act as the assessee has transferred the property earlier to such amendment brought under Sec.50C of the Act.

3.1 The ld. Assessing Officer observed that agreement of sale with Smt. Prabitha by the assessee mentioned that the sale of property to the tune of `34,50,000/-, but there is no evidence in the payments having received in the deed. Further, there was no possession of the property handed over to Smt. Prabitha. Since the possession of the property was not handed over to the seller on the date of agreement, the agreement has not considered for the purpose of computation of capital gains.

3.2 Accordingly, as per the sale deed dated 30.10.2008 the rights of the property was handed over to the seller to Srt. Prabitha W/o. G.

Diwakar on 30.10.2008 and hence the short term capital gain is arrived, also by invoking the provisions of Sec,50C of the Act. With these findings, the AO completed the assessment by determining the total income as under: ` 4,00,000/- Total Income a per order 143(1) ` 21,54,700/- Add: Additional STCG as per this order Total income assessed as per this order ` 21,54,700/- Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). On appeal, Ld.CIT(A) confirmed the reopening of assessment as well as addition made by the ld. Assessing Officer.

According to ld.A.R, stamp duty valuation was `92,70,450/-. Since the agreement was entered on 31.07.2008,amendement to Sec.50C, which came into effect from 01.10.2009, have no relevance. For this purpose, he relied on the judgement of jurisdictional High Court in the case of CIT Vs. R.Sugantha Ravindran reported in (2013) 352 ITR 488(Mad.).