Itta/508/2013 Of J Anjaneya Sharma v. Commissioner Of Income Tax-V

HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.508 of 2013 Date: 25.10.2013 Between:J.Anjaneya Sharma ANDCommissioner of Income Tax-V,Hyderabad. .....Appellant ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.508 of 2013 JUDGMENT:(per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is preferred against the judgment and orderdated 17.06.2013 passed by the learned Tribunal in relation to theassessment year 2007-08 and sought to be admitted on thefollowing suggested question of law: “Whether on the facts and in the circumstances of the case, the Appellate Tribunal erred in law inconcluding that for purpose of Section 50C of the Act,land and building are not to be considered asseparate assets and computation of capital gainscannot be bifurcated?” We have heard the learned Counsel for the appellant andhave gone through the judgment and order of the learned Tribunal. The whole issue in this case is whether for the purpose ofcomputing capital gains, the land and building can be treated asseparate assets as per Section 50C of the Income Tax Act, 1961(for short “the Act”)? The learned Tribunal held that such course is notpermissible. The asset in question (land and building) has to bevalued combining together and taking into consideration thevaluation adopted by the Sub Registration Authority or by thereport of the Departmental Valuation Officer. The Commissionerof Income Tax (Appeals) cannot adopt the valuation of the landdone by one authority or method and that of the building of anotherone. In this context, we have to examine whether such finding isacceptable by this Court or not. We set out Section 50C (1) of the Act, which reads as follows: “Where the consideration received or accruingas a result of the transfer by an assessee of a capitalasset, being land or building or both, is less than thevalue adopted or assessed or assessable by anyauthority of a State Government (hereafter in thissection referred to as the ‘stamp valuation authority’)for the purpose of payment of stamp duty in respectof such transfer, the value so adopted or assessed orassessable shall, for the purposes of Section 48, bedeemed to be the full value of the considerationreceived or accruing as a result of such transfer.” In this case, the interpretation of Section 50C of the Act isrequired to be ascertained by the Court. If sub-section (1) isanalyzed it would appear that there must be a transfer of a capitalasset, which means, the land or building or both. (2) Theconsideration received or accrued on the transfer is less than thevalue adopted or assessed or assessable by an authority of theState Government on which the stamp duty is paid. (3) If thevaluation adopted by the Stamp Valuation Authority is more thanthe consideration received, then such value has to be treated asthe full value of the consideration received or accrued for thepurpose of Section 48. Thus, it appears that there is scope for accepting thevaluation of the land in case of the vacant land alone and thevaluation of the building in case of the building only or in case ofland and building both. Thus, the valuation has to be adopted incase of transfer of land and building together jointly and notseparately. According to use, the learned Tribunal has correctlyinterpreted the aforesaid Section. However, the learned Counselfor the appellant says that if sub-sections (2) and (3) of Section50C of the Act are read together there is scope for taking valuation Thus, it appears that there is scope for accepting thevaluation of the land in case of the vacant land alone and thevaluation of the building in case of the building only or in case ofland and building both. Thus, the valuation has to be adopted incase of transfer of land and building together jointly and notseparately. According to use, the learned Tribunal has correctlyinterpreted the aforesaid Section. However, the learned Counselfor the appellant says that if sub-sections (2) and (3) of Section50C of the Act are read together there is scope for taking valuation of the land and building separately. We are unable to accept thissubmission as sub-section (2) of Section 50C has to be readwithout affecting the applicability of sub-section (1). Similarly,sub-section (3) has to be read subject to sub-section (2). According to us, where the applicability of sub- section (2) willmilitate against sub section (1), sub-section (1) has to be appliedignoring sub section (2). In this case, sub- section (1) isapplicable wholly and when it is applied, there is no scope forapplying sub-section (2). Therefore, we do not find any element oflaw involved for admission of this appeal. Accordingly, the appeal is dismissed. Miscellaneouspetitions, if any pending, shall stand disposed of. No costs. ___________________ K.J. SENGUPTA, CJ _________________ 25.10.2013 Gsn SANJAY KUMAR, J