Alok Mukherjee (Individual), Hathi Babu Bagh, Station Road,Jaipur v. Income Tax Officer, Ward 3(2), Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 53 / 2016 Alok Mukherjee (Individual), Hathi Babu Bagh, Station Road,Jaipur. ----Appellant Versus Income Tax Officer, Ward 3(2), Jaipur. ----Respondent Connected With D.B. Income Tax Appeal No. 54 / 2016 Satkori Mukherjee Charitable Trust, Hathi Babu Ka Bagh, Station Raod, Jaipur. ----Appellant Versus Income Tax Officer, Ward 3(2), Jaipur. ----Respondent D.B. Income Tax Appeal No. 55 / 2016 1. Late Smt. Seema Mukherjee through Legal Heirs 1/1 Sh. Alok Mukherjee 1/2 Sh. Aroop Mukherjee All residents of Hathi Babu Bagh, Station Road, Jaipur. ----Appellant Versus Income Tax Officer, Ward 3(2), Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Archit Bohra For Respondent(s) : Mr. Anuroop Singhi with Mr. Aditya Vijay _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE VIJAY KUMAR VYASJudgment 20/11/2017 1.In all these appeals common question of law and facts areinvolved hence they are decided by this common judgment. 2.By way of these appeals, the appellants have assailed thejudgment and order of the tribunal whereby tribunal has dismissedthe appeals of the assessee and in one appeal (887/JP/2012)allowed the appeal of the department. 3.This court while admitting the appeals framed followingsubstantial questions of law:- Appeal No.53/2016 Admitted on 27.04.2017 “(i) Whether in the facts and circumstances ofthe case the ITAT was justified in law in holdingthat capital gain accrued or arose to the assesseein A.Y. 2004-05 despite of the fact the agreementand the transfer of property took place in theyear 1980 (A.Y. 1981-82) and even thedocuments placed for registration on 31.03.2003that too relevant to the AY 2003-2004. (ii) Whether on the facts and in thecircumstances of the case, the ITAT was justifiedin law in confirming the findings of the CIT(A)holding the transfer of property from the date ofregistration of sale deed after coming into forceof Section 50C despite of the fact the agreementstook place in year 1975 and 1980 and thepossession of the properties were also given tothe transferee?” AppealNo.54/2016Admittedon27.04.2017 “(i) Whether in the facts and circumstances ofthe case the ITAT was justified in law in holdingthat capital gain accrued or arose to the assesseein A.Y. 2004-05 despite of the fact the agreementand the transfer of property took place in theyear 1980 (A.Y. 1981-82) and even thedocuments placed for registration on 31.03.2003that too relevant to the AY 2003-2004. (ii) Whether on the facts and in thecircumstances of the case, the ITAT was justifiedin law in confirming the findings of the CIT(A)holding the transfer of property from the date ofregistration of sale deed after coming into forceof Section 50C despite of the fact the agreementstook place in year 1975 and 1980 and thepossession of the properties were also given tothe transferee?” AppealNo.55/2016Admittedon27.04.2017 “(i) Whether in the facts and circumstances ofthe case the ITAT was justified in law in holdingthat capital gain accrued or arose to the assesseein A.Y. 2004-05 despite of the fact the agreementand the transfer of property took place in theyear 1980 (A.Y. 1981-82) and even thedocuments placed for registration on 31.03.2003that too relevant to the AY 2003-2004. (ii) Whether on the facts and in thecircumstances of the case, the ITAT was justifiedin law in confirming the findings of the CIT(A)holding the transfer of property from the date ofregistration of sale deed after coming into forceof Section 50C despite of the fact the agreementstook place in year 1975 and 1980 and thepossession of the properties were also given tothe transferee?” “(i) Whether in the facts and circumstances ofthe case the ITAT was justified in law in holdingthat capital gain accrued or arose to the assesseein A.Y. 2004-05 despite of the fact the agreementand the transfer of property took place in theyear 1980 (A.Y. 1981-82) and even thedocuments placed for registration on 31.03.2003that too relevant to the AY 2003-2004. (ii) Whether on the facts and in thecircumstances of the case, the ITAT was justifiedin law in confirming the findings of the CIT(A)holding the transfer of property from the date ofregistration of sale deed after coming into forceof Section 50C despite of the fact the agreementstook place in year 1975 and 1980 and thepossession of the properties were also given tothe transferee?” 3.1Thereafter, vide order dt. 7.11.2017 while allowingapplication, the following additional substantial questions wereadded for decision in appeal no.55/2016:- (iii) Whether on the facts and circumstances theITAT was justified in law in confirming the orderpassed by the CIT(A) ignoring that the Section50C is not applicable for property held underTrust for charitable purposes which is liable to beassessed u/s 11(1A) of the Act and not underchapter IV of the Act? (iv) Whether in the facts and circumstances ofthe case the ITAT was justified in law and notacted perversely in holding that the registrationof the trust under 12A has not beenextended/renewed despite of the fact that theregistration once granted u/s 12A is neitherrequired to be renewed nor can be cancelledwithout following procedure prescribed underthe Act?” 4. The facts of the case are that all the cases, notice U/s 148 ofthe Income Tax Act, 1961 (hereinafter referred as the Act) wasissued and detailed questionnaires were also sent by theAssessing Officer. There was no compliance from all the assessees,therefore, order U/s 144 was passed by the Assessing Officer in allthe cases. All the cases were scrutinized by the Assessing Officer.In all the cases, notices were issued to the assessees to furnishthe details but no compliance was made by them. Therefore, theld Assessing Officer decided the case U/s 144 of the Act. The ldAssessing Officer observed that in all the cases, details availablewith the department revealed that all these properties wereacquired by all the assessees prior to 01/4/1981 for ascertainingfair market value (in short FMV) of all the properties as on01/4/1981. The ld Assessing Officer collected information inrespect of transfer of immovable properties during thecontemporary period in respect of similar properties sold and also to ascertain the FMV based on the value adopted by theregistering authority during the period nearby 01/4/1981. As suchthe ld Assessing Officer called for information U/s 133(6) of theAct in respect of DLC rates of the above properties as on01/4/1981 from SubRegistrar Jaipur-2, who vide letter No. 1240dated 11/11/2011 had stated that DLC for the year 1981 was notdecided by the department. The DIG (Stamp), Jaipur had alsosubmitted the same report. He further observed thatsimultaneously, it was noticed that Shri Avani Kumar Mukherjee ,who happens to be the father/husband of the assessees hadentered into an agreement of sale of property on 01/8/1980situated at Hathi Babu Ka Bagh, Jaipur measuring 488.89 sq.mt toShri Ram Rikh Joshi for a consideration of Rs. One lac. This hasgiven the rate of Rs. 204/- per sq. mt. the properties sold by ShriAvani Kumar and the assessee were located in the same locality.The FMV is to be taken for 01/4/1981, thus there was a need forallowing additional cost of acquisition for intervening period so asto ascertain FMV as on 01/4/1981. Looking to the gap available inthe period it will be justified if 10% increase is allowed for thispurpose. Accordingly, the FMV as on 01/4/1981 calculated to Rs.225 per Sq.Mt. The ld Assessing Officer again gave show causenotice U/s 144 vide letter dated 13/12/2011, which has beenreproduced by the Assessing Officer in respective yearsassessment orders. The assessees filed reply on 19/12/2011 in allthe cases, which has also reproduced by the Assessing Officer inrespective assessment orders. The another written reply was filed by the assessees in the case of Shri Alok Mukherjee and ShriAroop Mukherjee (HUF), which has also been reproduced inrespective assessment orders by the ld Assessing Officer. 5.Counsel for the appellant contended that view taken by thetribunal is required to be reversed in view of decision of differenthigh courts. 6.In support of his contention, he relied on the decision ofDelhi High Court in Commissioner of Income Tax, Delhi vs. RamGopal reported in (2015) 372 ITR 498 (Delhi) wherein it has beenheld as under:- “6. In the present case the question is notwhether the assessee sold the booking rights andwas, therefore, entitled to benefit of capitalgains. It is, rather, whether his entering into thetransaction and acquiring a property for₹73,27,000/- (acquisition cost) amounted to hisacquiring a capital asset. In the light of thedefinitions of "capital asset" under Section2(14)and "transfer" under Section 2(47) asdiscussed in Gulshan (supra), this Court ITA70/2015 Page 4 has no doubt that the assessee'scontentions were merited. The reference to SurajLamps (supra), in the Court's opinion, is of noconsequence because the Supreme Court, onthat occasion had to deal with a propertytransaction and whether a sale transfer, basedupon confirming a GPA, amounted to sale orconveyance. That decision did not consider -rather had no occasion to deal with Sections2(14) and 2(47) in the context of a claim ofacquisition of rights of property and interest in acapital asset, for the purpose of income tax.“ 6.1He also relied upon the decision of this court in ITANo.172/2012 (The Commissioner of Income Tax vs. M/s. Pramod Chand Soni) decided on 19.9.2017 wherein it has been held as under:- “3. Counsel for the appellant contended that theTribunal has seriously committed an error inreversing the view taken by the CIT (A) whichhas confirmed the view taken by the A.O. on theissue that the price which has been fixed waschanged on the date on which the transactionwas valid, the DLC price was revised on20.11.2006 and the document was executed on8.1.2007, therefore, the Tribunal has assessed onthe basis of new DLC price fixed by theDepartment. 4. However, it is contended by counsel for therespondent that while considering the matter, theTribunal held as under: 6.1He also relied upon the decision of this court in ITANo.172/2012 (The Commissioner of Income Tax vs. M/s. Pramod Chand Soni) decided on 19.9.2017 wherein it has been held as under:- “3. Counsel for the appellant contended that theTribunal has seriously committed an error inreversing the view taken by the CIT (A) whichhas confirmed the view taken by the A.O. on theissue that the price which has been fixed waschanged on the date on which the transactionwas valid, the DLC price was revised on20.11.2006 and the document was executed on8.1.2007, therefore, the Tribunal has assessed onthe basis of new DLC price fixed by theDepartment. 4. However, it is contended by counsel for therespondent that while considering the matter, theTribunal held as under: “6.2. We have considered the writtensubmissions of both the parties and rejoinder ofthe assessee alongwith the order of the AO aswell as the order of CIT(A) and various caselaws. This is an undisputed fact that theagreement to sale was executed on 07.09.2006for a total consideration of Rs.13,81,00,000/-.The buyer requested to hand over the possessionof the land because it wanted to startconstruction work and development. Thecustodian with whom the possession of theproperty was lying handed over the possession.The buyer entered into a contract ofdevelopment. The development bill was raised.All these facts have been narrated at page 1 ofthe written submissions filed on behalf of theassessee and reproduced somewhere above inthe order. From these facts, it is amply provedthat requirement of provisions of section 2(47)(v) of the Act, has been satisfied as thepossession of the plot is given on 4.10.2006. Thesale deed was executed on 08.01.2007. Thepossession of land was already handed over. Thework was started already. Ample proof has beenplaced on record, which has been seen by us.The bill has been raised by M/s. Kshitiz EngineersIndia, Jaipur, dated 25.09.2006, who haveconduced standard penetration test for safebearing capacity for and on behalf of the buyer.The custodian of the property i.e. M/s. M.I.C. Pvt.Ltd. has handed over the possession by letterdated 02.10.2006, a copy of which is placed at page E- 4/50. Letter of work contract is alsoplaced at page E-4/52 of the paper book. Copy ofbill placed at page E-4/53 of the paper book. Thepayment is also made by the buyer, which ismentioned in the receipt placed at page E- 4/54of the paper book. It is further seen that LocalBody as revised circle rates w.e.f. 20.11.2006, acopy of certificate issued by the competentauthority is placed at page E-10/107-108 of thepaper book. The previous circle rates i.e. beforerevising the rates w.e.f. 20.11.2006 were @Rs.2500/- per yd to Rs.3000/- of the property inthe area where the property of the assessee issituated. A copy of these rates is placed at pageE-9/106 of the paper book. The competentauthority revised rates w.e.f. 20.11.2006 @Rs.4000/- per meter and on these basis, the saledeed is executed. The assessee has sold theproperty on the basis of circle rate beforerevising the same i.e. on 20.11.2006, as theproperty was sold by agreement dated07.09.2006. The provisions of section 2(47)(v),which have been mentioned in the writtensubmissions at page 5 and have been reproducedsomewhere above in this order. The provisionsclearly state that any transfer involving theallowing of the possession of any immovableproperty to be taken or retained in partperformance of a contract of the nature referredto in section 53A of the Transfer of Property Act,1882. Under the Income Tax Act, it has beenmentioned that any transaction, whether by wayof becoming a member of, or acquiring shares in,a co-operative society, company or otherassociation of persons or by way of anyagreement or any arrangement or in any othermanner whatsoever) which has the effect oftransferring, or enabling the enjoyment of, anyimmovable property. 6.3. The Hon’ble Gujarat High Court in the caseof CIT vs. Hormasji Mancharji Vaid (2001) 118Taxman 276 (Guj)/(FB) has clearly held thatwhen the transfer of document is executed andthe property passes and merely because there isno registration certificate, the state coffersshould not suffer. If the view is propounded thatonly on registration the act of transfer will becomplete, then in that case, if the document isnot registered, though the assessee will beenjoying the property, he will say that is notliable to pay the tax. But that is not the intention of the legislature. The word ‘transfer’ as indicatedin the income tax act is required to be consideredand not ‘sale’ as indicated in the Transfer ofProperty Act. 6.4. In various other cases, decided by theHon’ble High Courts and various Benches of theTribunal, has given similar findings. Some of thecases have been mentioned in writtensubmissions on pages 5 & 6, which arereproduced somewhere above in this order. 6.5. We further noted that even under section50C(1), it is clearly mentioned that where theconsideration received or accruing as a result ofthe transfer by an assessee of a capital asset,being land or building or both…….. From thelanguage of section 50C it is also proved thatproperty should be transferred. In the presentcase, the date of transfer is 04.10.2006. The saleagreement was entered on 07.09.2006. The saleconsideration is not less than the DLC rateprevalent at that time, that was Rs.2500 toRs.3000 per yd. The sale deed was executed on08.01.2007 on the basis of DLC rates prevalentat that time, which were modified by theappropriate authority by letter dated 20.11.2006much after the sale agreement and possessionhanded over. Therefore, in our considered view,once the possession was already given on thebasis of sale agreement then provision of section50C(1) of the Act, are not applicable as held byvarious Benches of the Tribunal. Various casesconsidered by the Jaipur Bench and JodhpurBench of ITAT are mentioned in para 26 of thewritten submissions, which are reproducedsomewhere above in this order.” 4.1 He relied on the following judgments:- 4.1 He relied on the following judgments:- (I) COMMISSIONER OF INCOME TAX, JAIPURII,JAIPUR Versus Shri Sher Singh Sunda, AnandNagar, Sikar, DB ITA No. 328/2011. 5. He has taken to us the observations made bythe Tribunal in para 2.6 2.8 and 2.9 which are asunder:- “2.6 We have heard both the parties. The copy ofgeneral power of attorney is available at pages12 to 14 of paper book filed by the ld. AR. As perthis general power of attorney, the assessee wasgiven authority to get different actions executedon behalf of the owner .The genera power of attorney was authorized to apply for approval u/s90B and was also given authority to look afterthe land and to get NOC from JDA and to get thepatta issued from JDA. It is true that generalpower was executed on stamp paper of Rs.500/-.The Sub-Registrar registered this power ofattorney at Rs.1,07,800/- against stamp duty ofRs.500/-. This general power of attorney hasbeen cancelled vide cancellation deed dated03.01.2007. The copy of this cancellation isavailable at pages 15 to 20 of the paper book. Inthe cancellation deed, it is not mentioned thatgeneral power of attorney has entered into anagreement for sale of land with M/s. Rising BuildEstate Ltd. The copy of sale agreement isavailable at pages 1 to 4 of the paper book. Theagreement has been made on 13.11.2006. Inthis agreement, it is mentioned that the assesseehas sold the land which he has purchased. In thisagreement, it is stated that the assessee haspurchased the land through agreement and hasalso obtained the possession. The agreementwith M/s. Rising Build Estate Ltd. by the assesseeis not in the capacity of general power ofattorney holder but has entered into anagreement as a person who has purchased theland through agreement for purchase of land.From these, it is clear that the assessee hastransferred the rights in land and building and weare not inclined to accept that the assessee hasnot transferred the immovable property. Section50C has been amended by the Finance Act, 2009and the word ‘assessable’ has been includedw.e.f. 1-10-2009. The memo explaining provisionof Finance (No.2) Bill, 2009 (refer to 314 ITR 214St.) states that the word ‘assessable’ has beenadded so that the transactions which areexecuted through agreement to sell power ofattorney are covered u/s 50C of the Act. It will beuseful to reproduce the relevant portion from thememo explaining the provisions of Finance (No.2)Bill, 2009. “The existing provisions of Section50C provide tht where the consideration receivedor accruing as a result (6 of 13) of the transfer of a capital asset, being land orbuilding or both, is less than the value adoptedor assessed by an authority of a StateGovernment (stamp valuation authority) for thepurpose of payment of stamp duty in respect ofsuch transfer, the value so adopted or assessedshall be deemed to be the full value of theconsideration received or accruing as a result of such transfer for computing capital gain.However, the present scope of the provisionsdoes not include transactions which are notregistered with stamp duty authority, andexecuted through agreement to sell or power ofattorney. With a view to preventing the leakageof revenue, it is proposed to amended theSection 50C so as to provide that where theconsideration received or accruing as a result oftransfer of a capital asset, being land or buildingor boht is less than the value adopted orassessed or assessable by an authority of a StateGovernment for the purpose of payment ofstamp duty in respect of such transfer, the valueso adopted or assessed or assessable shall bedeemed to be the full value of the considerationreceived or accruing as a result of such transferfor computing capital gain. Further, it is proposedto insert a new Explanation so as to clarify themeaning of the term “assessable”. Thisamendment will take effect from 1st October,2009 and shall accordingly apply in relation totransactions undertaken on or after such date;”2.8 The Jaipur Bench had occasion to considerthe applicability of Section 50C in the case oftransfer of land which has not registered. TheTribunal vide order dated 08.04.2011 in ITANo.1356/JP/2010 has held that Section 50C willnot be applicable when transaction has not beenregistered with Stamp Duty Authority. It will beuseful to reproduce para 2.4 of the Tribunal inthe case of ITO Vs. Shri Shailendra Soni. “2.4 Wehave heard both the parties. During the course ofhearing before us, the Ld. AR stated that theissue under reference is covered by the order orthe Tribunal in ITA No.42/JP/2010 dated08.06.2010. The Ld. AR filed the copy of theorder. It will be useful to reproduce para 5 of theorder dated 8th June, 2010 in the case of ShriDinesh Kumar Khatoria. “5. We have heard boththe parties. Section 50C is applicable whenconsideration received or accruing is a result oftransfer of capital asset being land or building orboth. The word capital asset is defined in Section2(14) of the I.T. Act and according to whichcapital assets means property of any kind held byan assessee. The assessee entered into purchaseagreement for purchase of property. Theassessee sold such agreements. Thus what theassessee has transferred is his right to purchaseplots (7 of 13) as per agreement.Section 50C is applicable when consideration received or accruing is as per result of transfer ofcapital asset being land or building or both.Section 50C is a deeming provision whichincorporates a legal fiction to adopt the stampduty value as full consideration for transfer ofcapital asset being and building. The legal fictioncannot extend beyond the purpose for which it isenacted. Hence the legal fiction created inSection 50C cannot be applied in respect oftransfer of capital asset other than land orbuilding including the rights in land and buildingjust like tenancy right. In the instant case, theassessee has not received consideration onaccount of transfer of land and building but hasreceived consideration in respect of tranfer ofpurchase agreements. The Jaipur Bench in thecase of Vijay Luxmi Dhadia, 20 DTR 365 held thatSection 50C will not apply if the transferdocument is not stamped. The plots are still to beregistered with Stamp Valuation authorities. TheLd. CIT(A) has clearly observed that the word‘assessable’ has been inserted in Section 50C ofthe Income Tax Act by the Finance (No.2) Act,2009 w.e.f. 01.10.2009. The consideration asadopted by the stamp valuation authority can betaken as full consideration if the value adoptedby the stamp valuation authority is assessablew.e.f. 1.10.2009. The assessment year underreference is 2006-07 and therefore, the amendedprovisions of Section 50C is not applicable. In thememo explaining the provisions of Finance (No.2)Act, 2009, it was mentioned as under for makingthe amendment in Section 50C of the Income TaxAct. “The existing provisions of Section 50Cprovide that where the consideration received oraccruing as a result of the transfer of a capitalasset, being land or building or both, is less thanthe value adopted or assessed by an authority ofa State Government (Stamp valuation authority)for the purpose of payment of stamp duty inrespect of such transfer, the value so adopted orassessed shall be deemed to be the full value ofthe consideration received or accruing as a resultof such transfer for computing capital gain.However the present scope of the provisions doesnot include transactions which are not registeredwith stamp duty authority, and executed throughagreement to sell or power of attorney. With aview to preventing the leakage of revenue, it isproposed to amend the Section 50C so as toprovide that where the consideration received oraccruing as a result of transfer of a capital asset, being land or building or both is less than thevalue adopted or assessed or assessable by anauthority of a State Government for the purposeof payment of stamp duty in respect of suchtransfer, the value so adopted or assessed orassessable shall be deemed to be the full value ofthe consideration received or accruing as a resultof such transfer for (8 of 13) computing capital gain. Further, it is proposed toinsert a new Explanation so as to clarify themeaning of the term “assessable”. Thisamendment will take effect from 1st October,2009 as shall accordingly apply in relation totransactions undertaken on or after such date.”Hence in the instant case, the AO was notjustified in applying the provisions of Section 50Cof the I.T. Act for increasing the short termscapital gain. The Ld. CIT(A) was justified indeleting the increase in the value of short termcapital gain. It is not the case of the Revenuethat the assessee has received moreconsideration as shown in the agreement. In casethere was any evidence to show that theconsideration received by the assessee was morethan the consideration mentioned in theagreement then the Revenue could haveincreased the short term capital gain. On thebasis of Section 50C of the Act, the AO was notjustified in enhancing the short term capital gain.We therefore, hold that the Ld. CIT(A) wasjustified in deleting the enhancement in thequantum of short term capital gain andaccordingly the appeal of the Revenue isdismissed.” 2.9 The assessee has raised the crossobjection. In the C.O., it is mentioned that the ld.CIT(A) is not justified in holding that transactionis regarded as transfer attracting Section 50C ofthe Act. We had already discussed this issue. Wehad already held that it is case of transfer ofland. Section 50C of the Act is not applicablebecause the substituted word “assessable” isapplicable in respect of transfer of transactionafter 1-10-2009. Thus the C.O. of the assessee ispartly allowed.” 9. He has further contended that the Tribunalwhile considering the case of assessee in crossobjection has taken into consideration theprovisions of Section 50(C) and in view of thedecision rendered by the Madras High Courtreported in (2013) 32 Taxmann.com 274(Madras)has held in para 7,8,9 and 10 which reads as 9. He has further contended that the Tribunalwhile considering the case of assessee in crossobjection has taken into consideration theprovisions of Section 50(C) and in view of thedecision rendered by the Madras High Courtreported in (2013) 32 Taxmann.com 274(Madras)has held in para 7,8,9 and 10 which reads as under:- “7.Learned counsel for the assesseeplaced a circular in Circular No.5/2010/(F.No.142/13/2010-SO(TPL)) dated 03.06.2010issued by the Board and submitted that as perthe circular, it is made clear that the amendmentmade by the Finance (No.2) Act, 2009 is onlyprospective in nature and cannot be appliedretrospectively. 8.We have perused the abovecircular. It is stated therein that the scope of theprovisions does not include transaction which arenot registered with stamp duty valuationauthority and executed through agreement to sellor power of attorney. Consequently, it is madeclear therein that the amendments have beenmade applicable with effect from 01.10.2009 andtherefore, they will apply only in relation totransaction undertaken on or after such date. Therelevant portion of the circular is extractedhereunder:"23.4.Applicability:-Theseamendments have been made applicable witheffect from 1st October, 2009 (12 of 13) and will accordingly, apply in relationto transactions undertaken on or after suchdate." 9.Learned counsel for the Revenue is notdisputing about the existence of such circularissued by the Board. If the Board has issued acircular clarifying the applicability of Section 50Cin pursuance of the amendment made byAmendment Act 2 of 2009, we fail to understandas to how the Revenue can canvass the sameissue in this case which in effect is against thecircular issued by the Board. Certainly, theRevenue is bound by the circular issued by theBoard. At this juncture, it is pertinent to notethat in a decision made in the case of State ofTamil Nadu and another Vs. India Cements Ltd.and another reported in (2011) 40 VST 225 (SC),the Honourable Supreme Court has held that thecirculars issued by the Revenue are binding onthe Department and therefore, they cannotrepudiate that they are inconsistent with thestatutory provisions. Relevant paragraphs 21 and22 are extracted hereunder: "21.It is manifestfrom the highlighted portion of the circular thatas per the clarification issued by theCommissioner of Commercial Taxes, in exerciseof the power conferred on him under Section 28Aof the TNGST Act, the benefit of the sales taxdeferral scheme would be available to a dealerfrom the date of reaching of BPV or BSV,whichever is earlier, as is pleaded on behalf ofthe first respondent. It is trite law that circulars issued by the Revenue are binding on thedepartmental authorities and they cannot bepermitted to repudiate the same on the plea thatit is inconsistent with the statutory provisions orit mitigates the rigour of the law. 22.In PaperProducts Ltd. Vs. Commissioner of Central Excise((2001) 247 ITR 128 SC: (1999) 7 SCC 84),while interpreting Section 37B of the CentralExcise Act, 1944, which is in pari materia withSection 28A of the TNGST Act, this Court hadheld that the circulars issued by the CentralBoard of Excise and Customs are binding on theDepartment and the Department is precludedfrom challenging the correctness of the saidcirculars, even on the ground of the same beinginconsistent with the statutory provision. It wasfurther held that the Department is precludedfrom the right (13 of 13) to filean appeal against the correctness of the bindingnature of the circulars and the Department'saction has to be consistent with the circularwhich is in force at the relevant point of time." 10. Before proceeding with the matter, it will not 10. Before proceeding with the matter, it will not be out of place to mention here that thosetransactions which are shown as transactionunder Section 50© [Explanation-2], even if takeninto consideration, the transaction which takeplace as short term capital gain in totalconsideration of the payment after saleagreement was determined as Rs.1.35 croresand it cannot be assessed. Therefore, both theauthorities have committed no error in reachingthe conclusion. 2. Commissioner of Income Tax vs. HormasjiMancharji Vaid, (2001) 250 ITR 0542 20. In our view, considering the aforesaid decisionsand the object of the Act, definition given in theAct is required to be taken into consideration.When the document is executed, the propertypasses and merely because there is noregistration certificate, the State coffers shouldnot suffer. If the view propounded that only onregistration, act of transfer will be complete, thenin that case, if the document is not registered,though the assessee will be enjoying theproperty, he will say that he is not liable to paythe tax. But that is not the intention of theLegislature. In our opinion, the word 'transfer' asindicated in the Income-tax Act is required to beconsidered and not 'sale' as indicated in the Transfer of Property Act. If the intention of theLegislature was different, then there would havebeen specific reference. Relevant provision ofclause (47) of section 2 is as under: Unless context otherwise requires, transfer is tobe understood in the simple meaning as it isindicated which includes sale, exchange orrelinquishment oftheasset ortheextinguishment of any rights therein or thecompulsory acquisition thereof under any law. Ifthe words are defined in the Act itself, then it isnot proper to read the meaning of the similarwords given in another statute unless otherwiseexpressly provided. In the Income-tax Act,wherever Legislature has thought fit to have themeaning of the word provided in differentstatute, specific provision has been made. In ouropinion, therefore, 'transfer' as defined in the Actis to be given simple meaning as indicated. There are various methods by which there can beavoidance of tax. The tax evaders always keepfaith in their counterparts. Even property is beingtransferred by merely executing special power ofattorney on the stamp paper of Rs. 20 and thetransfer deed is not executed as contemplatedunder the law. The transferor puts transferee inpossession but in view of the document, namely,power of attorney executed by the transferor, it issaid that the transferee is not the owner of theproperty though for all practical purposestransferee acts as the owner, in view ofirrevocable power of attorney. By this method taxevaders are securing double benefits, i.e.,avoidance of income-tax and stamp duty. Itseems that considering various devices which thetax evaders are applying, the Legislature,therefore, amended by inserting clauses in thedefinition of 'transfer' by clause (47) of section 2which is as under: (47) 'transfer', in relation to a capital asset,includes,-- (i) the sale, exchange or relinquishment of theasset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under anylaw; or (iv) in a case where the asset is converted by theowner thereof into, or is treated by him as,stock-in- trade of a business carried on by him,such conversion or treatment; or (v) any transaction involving the following of thepossession of any immovable property to betaken or retained in part performance of acontract of the nature referred to in section 53Aof the Transfer of Property Act, 1882 (4 of 1882);or (47) 'transfer', in relation to a capital asset,includes,-- (i) the sale, exchange or relinquishment of theasset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under anylaw; or (iv) in a case where the asset is converted by theowner thereof into, or is treated by him as,stock-in- trade of a business carried on by him,such conversion or treatment; or (v) any transaction involving the following of thepossession of any immovable property to betaken or retained in part performance of acontract of the nature referred to in section 53Aof the Transfer of Property Act, 1882 (4 of 1882);or (vi) any transaction (whether by way ofbecoming a member of, or acquiring shares in, aco-operative society, company or otherassociation of persons or by way of anyagreement or any arrangement or in any othermanner whatsoever) which has the effect oftransferring, or enabling the enjoyment of, anyimmovable property. Explanation. -For the purposes of sub-clauses (v)and (vi), 'immovable property' shall have thesame meaning as in clause (d) of section 269UA. 22. In case of ownership, there is a transfer ofcapital assets. This is a case of lease. Thetransferee was put in possession and wasenjoying the property as a lease holder. Therecannot be different criteria for transfer of capitalasset. For the purpose of tax even if document,i.e., conveyance is not executed but thetransferee exercises all the rights of the trueowner, one cannot emphasize for the taxationpurpose that unless and until the deed ofconveyance transferring the rights in property isexecuted, the transferee is not liable though dideverything which is required for acquiring aproperty. As pointed out, vendor is not permittedin law to dispossess or question the title of thevendee. Under the circumstances, our answerwould be that transfer of immovable property ofthe value exceeding Rs. 100 can be said to havebeen effected on the date of execution of thedocument. In view of this answer, it is notnecessary to answer further questions. 3. Smt. D. Kasturi vs. Commissioner of IncomeTax and Anr. (2010) 323 ITR 0040 4. We have carefully considered the respectivesubmissions. In order that the doctrine of partperformance as contained in Section 53A of theTransfer of Property Act to be invoked, it is 3. Smt. D. Kasturi vs. Commissioner of IncomeTax and Anr. (2010) 323 ITR 0040 4. We have carefully considered the respectivesubmissions. In order that the doctrine of partperformance as contained in Section 53A of theTransfer of Property Act to be invoked, it is necessary that the act or part performance mustbe such as not only be referable to the contractof which part performance is alleged, but bereferable to no other title. The handing over ofpossession of agreement. All that is required isthat an agreement in writing to be signed by thetransferor which could be gathered from theevidence as will. The facts of this case wouldreveal that the agreement dated March 29, 1993,between the assessee and the agreement holderM/s. Chettinad Investments was with referenceto the whole property. Clause (1) of theagreement contemplates that the vendor shallsell and the purchaser shall purchase theproperty in question. For the execution of saledeed, a no objection certificate, from thecompetent authority under the Income Tax Act isnecessary, as could be seen from Clause (4) ofthe agreement. Such a certificate was alsoobtained. Nevertheless, the assessee had notexecuted the necessary sale deeds. The factremains that the assessee had received the fullsale consideration of Rs. 25,00,000 from M/s.Chettinad Investments, namely, the agreementholder even before the power of attorney wasexecuted. The contention of the learned seniorcounsel for the assessee is that the act of theassessee in selling the portion of the property tothird parties in subsequent years and executingthe sale deeds in favour of such vendees byutilising the power of attorney granted to thepartners of the firm has much relevance whileconsidering the application of Section 53A of theTransfer of Property Act. In our opinion, the saidcontention cannot be accepted. For application ofSection 53A the relevant consideration would bethe clauses in the agreement between the partiesto the agreement and their performance in termsof the agreement. The subsequent act of theassessee in executing the power of attorney andthe sale deeds executed by the power holder onthe basis of such power of attorney would not inany way alter the status of the parties to theagreement dated March 29, 1993, forapplicability of Section 53A as has been rightlyheld by the learned single judge. The assesseecould no longer assert possessory rights againstthe firm to which possession was already givenpursuant to the agreement and that too afterreceiving the full sale consideration. 4. Navneet Kumar Thakkar vs. Income TaxOfficer (1007) 112 TTJ 0076 4. Navneet Kumar Thakkar vs. Income TaxOfficer (1007) 112 TTJ 0076 7. A deeming provision has been enshrined inSection 50C by virtue of which a legal fiction hasbeen created for assuming the value adopted orassessed by any authority of State Governmentas the full value of sale consideration received inrespect of such transfer. A legal fiction has beencreated only in respect of the cases where theconsideration received by the assessee is lessthan the value adopted or assessed by the stampvaluation authority of the State Government forthe purpose of payment of stamp duty "inrespect of such transfer". It is a trite law that thelegal fiction cannot be extended beyond thepurpose for which it is enacted. Section 50Cembodies the legal fiction by which the valueassessed by the stamp duty authorities isconsidered as the full value of consideration forthe property transferred. It does not go beyondthe cases in which the subject transferredproperty has not become the subjectmatter ofregistration and the question of valuation forstamp duty purposes has not arisen. By nostretch of imagination, the legal fiction confinedto restricted operation can be widened to includewithin its sweep all the cases where "suchproperty" has not been valued by the Stateauthorities for stamp duty purposes. The Hon'bleSupreme Court in the case of CIT v. AmarchandN. Shroff MANU/SC/0196/1962 has held that"legal fiction are only for a definite purpose andthey are limited to the purpose for which theyare created and should not be extended beyondthe legitimate field". Similar view has beenreiterated by the Hon'ble Summit Court in thecase of CIT v. Mother India RefrigerationIndustries (P) Ltd. MANU/SC/0135/1985. Thus,what is relevant for the attract ability of Section50C, is that the property which is under transferfrom the assessee to another person should havebeen assessed at a higher value for stampvaluation purpose than that received or accruingto the assessee. The value adopted or assessedby the stamp valuation authorities has to be ofthe very same property, which is thesubjectmatter of transfer. The language of thissection provides in unambiguous terms that thevalue adopted or assessed by the stampvaluation authority has to be substituted with thesale consideration of the "such property". But for Section 50C, there is absolutely no warrant forreplacing the value adopted by the stampvaluation authority with the actual saleconsideration for the purposes of computingcapital gain. Thus it is clear that the property inrespect of which valuation is made for purposesof stamp duty must be the very same property,which is the subjectmatter of transfer forcalculating capital gain by invoking the provisionsof this section. It is wholly irrelevant to considerthe assessed value of another property for stampduty purposes as full value of consideration bymaking reference to the Valuation Officer underSection 55A. Unless the property transferred hasbeen registered by sale deed and for thatpurpose the value has been assessed and stampduty has been paid by the parties, Section 50Ccannot come into operation. In such a situation,the position existing prior to Section 50C wouldapply and the onus would be upon the Revenueto establish that sale consideration declared bythe assessee was understated with someclinching evidence. The relevant judgmentsdiscussed above viz., K.P. Varghese (supra) andShivakami Co. (P) Ltd. (supra) would come intooperation and govern the determination of fullvalue of consideration. 8. Adverting to the facts of the case, it is noticedthat the assessee transferred the property inquestion by executing an agreement which wasnot registered with the registering authority. Insuch a case, Section 50C could not have comeinto operation and the resultant application ofSection 55A by which the AO got the propertyvalued and adopted the report of the ValuationOfficer as the sole basis for making the impugnedaddition was wholly invalid. As the AO has notembarked upon making enquiries from thepurchaser about the actual sale consideration,and has not brought on record any other materialworth the name to show that the saleconsideration declared by the assessee wasunderstated, in my considered opinion theaddition was wrongly made and sustained. I,therefore, order for the deletion of the addition. 4.2 It is further contended that taking intoconsideration the actual agreement was prior to20.11.2006, the view taken by the Tribunal isrequired to be accepted in favour of theassessee. 5. We heard the learned counsel for the parties. 5.1 It is well settled that the parties, if theyadmitted even after by a MOU and in viewthereof, possession was already handed over on4th October, 2006, no person is ready to giverevised rates. 5.2 On the second issue, the Tribunal whileconsidering the matter has observed specificallythat there is no scientific method adopted andheld as under:- 10. After considering the order of the AO and theCIT(A) and the written submissions, we are ofthe consi