D.C.I.T CIR - 10,KOLKATA, KOLKATA vs. M/S LALITA STEEL INDUSTRIES PVT LTD, KOLKATA

The grounds of appeal

Based on the letter of the Addl.Registrar of Assurances and keeping in mind the provisions of Sec.50C of the Act, the AO was of the view that the sale consideration of the property has to be substituted from Rs.79,00,000 as adopted by the Assessee in his computation of capital gain to Rs.l,72,32,S94/- (after deducting 8% of Rs.l,87,31,0301-) the value of the property as per valuation of Registrar of Assurances for the purpose of stamp duty and registration. The AO accordingly computed capital gain at a sum of Rs.98,50,083/- (Rs.l,72,32,S94/- - Rs.73,82,511/-) was computed by him to be profit/ STCG on transfer. Since Rs.5,17,489/- was already offered to taxation, balance sum of Rs.93,32,S94/- was added back to total income.

The stand of the Assessee was that the Ld. A. O. ignored the submission of the Assessee that the conveyance was not registered during the year in question and that the term "assessable" was inserted in sec. 50C w.e.f. 01.10.2009, therefore, the assessable value of the property in question cannot be considered as deemed consideration. Prior to such amendment it is only in a case where transfer is registered that the provisions of Sec.50C of the Act were attracted and when transfer is effected u/s.2(47) of the Act without registration provisions of Sec.50C of the Act were not applicable. The amendment referred to above was made with a view to remove the lacunae in the law but was applicable only prospectively. This was not considered by the AO. -M/s. Lalita Steel Industries Pvt. Ltd. A.Y.2009-10

On appeal by the assessee the CIT(A) deleted the addition made by AO by observing as follows :- “I have considered the finding of the AO. and the written submission and case laws filed and discussed by the AR. during the appellant proceeding I find that the agreement to sale in this case as completed on 06-01- 2009 because the possession of the office space as given on the simultaneously. Therefore, in my opinion keeping in vie the judgment of the Hon'ble Supreme Court in the case of Sedeo Forex International (supra) as well as the Bombay Tribunal Decision in the case of AClT Vs. Praveen Gandhi (supra). In this case the amended and inserted word " assessable" in Sec. 50C of the I.T.Act, 1961 which came into effect from 01-10-2009 is not applicable. Therefore, AO's action of making assessment on the basis of assessable value of the property in this case is not justified. Thus, assessee's appeal on ground no. 1 is allowed.”

Aggrieved by the order of CIT(A) revenue has preferred the present appeal before the Tribunal.

At the time of hearing the learned counsel for the assessee fairly submitted that the Hon’ble Çalcutta High Court in the case of M/s. Bagri Impex Pvt. Ltd. Vs ACIT 214 Taxman 305 (Cal) took a view that the amendment to the provision of Section 50C of the Act by the Finance Act 2009 w.e.f. 1.10.2009 was applicable retrospectively. In view of the above ruling the decision of CIT(A) has to be reversed. However, it was brought to our notice as against the decision of Hon’ble Calcutta High Court the assessee has preferred a Stay Leave Application in SLP vide Civil No.17138/2013 in the Hon’ble Supreme Court by its order dated 10.05.2013 was pleased to stay in the implementation of the order of the Hon’ble Calcutta High Court. The limited request of the learned counsel for the assessee was that the matter may be remanded to the AO to decide in accordance with the ultimate outcome of the appeal pending before the Hon’ble Supreme Court. The learned DR relied on the order of AO.

We are of the view that it would be just and proper to set aside the order of CIT(A) on this issue and remand the same to the AO for consideration afresh in the light of the legal position as it may be emanated from the order of the Hon’ble Supreme court -M/s. Lalita Steel Industries Pvt. Ltd. A.Y.2009-10 in the pending appeal referred to above. The AO will afford opportunity of being heard to the assessee before deciding the issue afresh. For statistical purposes the appeal of the revenue is treated as allowed.

In the result the appeal of the revenue is allowed for statistical purposes. Order pronounced in the Court on 11.05.2016.