Kotha Durga Srinivas, Vijayawada v. ITO, Vijayawada

ITA 32/VIZ/2009 | 2005-2006
Pronouncement Date: 07-09-2010 | Result: Allowed

Appeal Details

RSA Number 3225314 RSA 2009
Assessee PAN AHZPK1830E
Bench Visakhapatnam
Appeal Number ITA 32/VIZ/2009
Duration Of Justice 1 year(s) 7 month(s) 15 day(s)
Appellant Kotha Durga Srinivas, Vijayawada
Respondent ITO, Vijayawada
Appeal Type Income Tax Appeal
Pronouncement Date 07-09-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 07-09-2010
Date Of Final Hearing 22-04-2010
Next Hearing Date 22-04-2010
Assessment Year 2005-2006
Appeal Filed On 23-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.32/VIZAG/2009 ASSESSMENT YEAR : 2005-06 KOTHA DURGA SRINIVAS VIJAYAWADA ITO WARD-2(4) VIJAYAWADA (APPELLANT) VS. (RESPONDENT) PAN NO.AHZPK 1830E APPELLANT BY: SHRI B.V.S. CHALAPATHI RAO ADVOCATE RESPONDENT BY: SHRI J. SIRI KUMAR DR ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) ON VARIOUS GROUNDS BUT THEY ALL RELATE TO TH E INVOCATION OF PROVISIONS OF SECTION 50C OF THE I.T. ACT AGAINST THE ASSESSEE S AND THEREAFTER ASSESSING THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. 2. THE BRIEF FACTS RELEVANT TO THE IMPUGNED ISSUE B ORNE OUT FROM THE RECORD ARE THAT SHRI L. VENKATESWARA RAO FATHER OF SHRI L. SARVESWARA PRASAD ACQUIRED A PLOT OF LAND MEASURING 412.5 SQ.YDS. ALO NG WITH A TILED HOUSE THEREON ON 20 TH AUGUST 1941 T. ANJANEYULU. SINCE THIS PROPERTY W AS AN ANCESTRAL PROPERTY SHRI L. SARVESWARA PRASAD AND H IS SON SHRI L. MANIKANTA VAMSI BECAME THE LEGAL OWNER. SHRI L. SARVESWARA P RASAD HAD BORROWED FUNDS FROM THE MARKET BUT HE COULD NOT REPAY THE SA ME AND THEREAFTER A DECREE WAS PASSED BY THE COURT TO REPAY SUCH LOANS. SHRI L. SARVESWARA PRASAD HAD NO OPTION BUT TO DISPOSE OF THIS PROPERT Y. HE THEREFORE INVITED PROBABLE BUYERS AND THE ASSESSEE OFFERED THE HIGHES T AMOUNT OF RS.12 LAKHS FOR PURCHASING THE SAID PROPERTY. AFTER FINALIZING THIS DEAL ASSESSEE IMMEDIATELY WITHDREW CASH OF RS.11 75 000 FROM HIS BANK ACCOUNT AND MADE THE PAYMENTS AS UNDER: 2 A) AMOUNT PAID TO KANDULA GURUSWAMY REDDY IN CASH IN 4 00 000 O.S. NO.59 OF 2000 DECREED IN 2 ND ADDL. DT. JUDGE COURT VIJAYAWADA B) AMOUNT DEPOSITED IN THE NAME OF MINOR AT KARNAT AKA 4 00 000 BANK LTD. ON 13.8.2004 VIDE FIXED DEPOSIT NO.1 18983. C) AMOUNT PAID IN CASH TO SRI L. SARVESWARA PRASAD 3 75 000 ----------- TOTAL: 11 75 000 ----------- 3. THE ASSESSEE ALSO ENTERED INTO AN AGREEMENT WITH SHRI L. SARVESWARA PRASAD AND L. MANIKANTA VAMSI ON 16.8.2004 THROUGH SALE AGREEMENT-CUM- GENERAL POWER OF ATTORNEY DULY REGISTERED WITH THE SUB-REGISTRAR OFFICE. IT WAS AGREED THROUGH THIS AGREEMENT THAT THE REMAININ G AMOUNT OF RS.25 000/- WOULD BE PAID AT THE TIME OF REGISTRATI ON OF SALE DEEDS AND HANDING OVER THE POSSESSION OF THE PROPERTY. THE A SSESSEE SOLD THIS PROPERTY AS A GENERAL POWER OF ATTORNEY OF L. SARVESWARA PRA SAD AND L. MANIKANTA VAMSI TO P. VIJAYA RAMA RAJU THROUGH REGISTERED SAL E DEED FOR A CONSIDERATION OF RS.12 LAKHS ON 16.9.2004. AT THE TIME OF SALE DEED THIS PROPERTY WAS VALUED BY THE S.R.O. AT RS.20 70 000/- AND ACCORDINGLY THE STAMP DUTY AND REGISTRATION CHARGES WERE COLLECTED. RELYING UPON THE VALUATION ADOPTED BY THE S.R.O. THE ASSESSING OFFI CER HAS INVOKED THE PROVISIONS OF SECTION 50C OF THE I.T. ACT FOR DETER MINING THE SHORT TERM CAPITAL GAINS AND ISSUED A SHOW CAUSE NOTICE TO THE ASSESSE E. IN RESPONSE THERETO THE ASSESSEE HAS FILED A WRITTEN SUBMISSIONS WHICH ARE EXTRACTED HEREUNDER: A) THE ORIGINAL REGISTERED DOCUMENT NO.2997/2004 EXEC UTED BY SRI L. SARVESWSARA PRASAD ETC. IS IN THE NATURE OF POWER O F ATTORNEY CUM NON POSSESSORY SALE AGREEMENT. ASSESSEE WAS TREATED AS AN AGENT ACTING FOR L. SARVESWARA PRASAD AND OTHERS IN THE S AID DOCUMENT. NOWHERE ASSESSEE WAS MENTIONED AS A PURCHASER. B) SUBSEQUENTLY THE REGISTERED DOCUMENT NO.3487/04 WA S EXECUTED BY ASSESSEE IN FAVOUR OF SRI P. VIJAYA RAMA RAJU AN D OTHERS ACTING AS AN AGENT OF SRI L.S. PRASAD AND OTHERS. AS SUCH ASSESSEE WAS NEITHER THE PURCHASER NOR THE SELLER OF THE SAID PR OPERTY BUT ONLY ACTED AS AN AGENT OF THE SELLERS M/S. L.S. PRASAD A ND OTHERS AND WAS REPRESENTED AS SUCH TO THE PURCHASER (SRI P.V.R . RAJU). 3 C) SINCE ASSESSEE HAS EXECUTED THE ABOVE DOCUMENT AS A RESIDENT AGENT OF SELLERS (SRI L.S. PRASAD AND OTHERS) NO T AX LIABILITY COULD HAVE BEEN IMPOSED ON ASSESSEE DUE TO ABOVE TRANSACT ION. IN THIS CONNECTION IT MAY ALSO BE NOTED THAT THE CONSIDERA TION IS ONLY RS.12 00 000/- RECEIVED BY THE SELLERS AND GIVEN BY THE PURCHASERS. IF ASSESSEE IS THE REAL BENEFICIAL SELLER AT LEAST S OME EXCESS AMOUNT SHOULD HAVE BEEN RECEIVED BY ASSESSEE WHICH ADMITTE DLY NOT THE CASE. SINCE ASSESSEE WAS NOT THE BENEFICIARY OF TH IS TRANSACTION AND ACTED ONLY AS AN AGENT NO LIABILITY FOR CAPITA L GAINS CAN ARISE AGAINST ASSESSEE IN HIS INDIVIDUAL CAPACITY. D) WITHOUT PREJUDICE TO ABOVE CONTENTION IT IS HUMBLY SUBMITTED THAT THE DEEMED CONSIDERATION UNDER EARLIER DOCUMENT NO. 2997/04 IS RS.19 00 000/- AND TOGETHER WITH STAMP DUTY AND OTH ER EXPENSES IT WORKS OUT TO RS.20 00 000/-. THE NUMBER 3487/04 IS RS.20.77 LAKHS. CAPITAL GAIN IF AT ALL TO BE CONSIDERED IN ASSESSEES HAND CAN ONLY BE RS.77 000/- I.E. DIFFERENCE BETWEEN DEEMED PURCHASE COST OF RS.20 00 000/- AND DEEMED SALE CONSIDERATION OF RS.20.00 LAKHS. E) IT IS SUBMITTED THAT THE APPLICATION OF THE FICTION ENACTED UNDER SECTION 50C OF THE I.T. ACT 1961 CANNOT BE LIMITED TO ONLY SALE TRANSACTION BUT HAS ALSO TO BE EXTENDED TO PURCHASE TRANSACTION AS WELL AS SALE OR PURCHASE ARE TWO SIDES OF THE SAME COIN. IT IS ALSO SETTLED LAW THAT BY THE APEX COURT AND OTHER HIGH C OURTS THAT THE APPLICATION OF A FICTIONAL PROVISION CAN NOT BE LIM ITED TO A LIMB OF AN INTEGRATED TRANSACTION BUT SHOULD BE EXTENDED THRO UGH OUT THE SAID TRANSACTION UP TO ITS LOGICAL END. F) WITHOUT PREJUDICE TO THE ABOVE SUBMISSION IT IS SU BMITTED THAT THE VALUATION BY THE STATE GOVERNMENT SUB-REGISTRAR IS VERY MUCH ON HIGHER SIDE CONSIDERING THE LOCATION OF THE GOVERNM ENT WHICH CONCERNS ONLY PRIME PROPERTIES SITUATED IN M.G. ROA D AND NOT INTERIORLY SITUATED PROPERTIES. AS SUCH WITHOUT GR OUND REALITIES REGISTRATION VALUES WERE ADOPTED BY THE STATE GOVER NMENT. 4. THE A.O. WAS NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEES AND HAS CONCLUDED THAT ASSESSEE HAD PURCHASED THE P ROPERTY FROM MR. L. SARVESWARA PRASAD AND L. MANIKANTA VAMSI THROUGH RE GISTERED SALE AGREEMENT-CUM-POWER OF ATTORNEY AND THEREAFTER SOLD THE PROPERTY THROUGH REGISTERED SALE DEED TO SHRI P. VIJAYA RAMA RAJU. SINCE THE ASSESSEE HAD DECLARED LESS SALE CONSIDERATION THAN THE ESTIMATED BY THE S.R.O. FOR THE PURPOSE OF STAMP DUTY THE PROVISIONS OF SECTION 50 C ARE ATTRACTED. THE A.O. ACCORDINGLY ADOPTED DEEMED CONSIDERATION AT RS.20.7 7 LAKHS AND CALCULATED THE SHORT TERM CAPITAL GAIN AT RS.8 77 000/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND REITERATED ITS CONTENT IONS BUT CIT(A) WAS NOT 4 CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEES AN D THE ADDITIONS WERE CONFIRMED. 5. NOW THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT HE HAS MADE THE PAYMENT OF RS. 12 L AKHS TO SHRI L. SARVESWARA PRASAD AND HIS SON L. MANIKANTA VAMSI AN D THEY HAVE EXECUTED THE SALE AGREEMENT-CUM-GENERAL POWER OF ATTORNEY IN HIS FAVOUR BUT THE POSSESSION OF THE PROPERTY WAS NOT GIVEN TO THE ASS ESSES AND THESE FACTS ARE QUITE EVIDENT FROM THE SALE AGREEMENT-CUM-POWER OF ATTORNEY OF WHICH TRANSLATED COPY IS AVAILABLE AT PG.NO.14 TO 16 OF T HE COMPILATION OF THE ASSESSEES. THROUGH THIS POWER OF ATTORNEY ASSESSE E WAS AUTHORIZED TO EXECUTE THE SALE DEED IN FAVOUR OF ANY PERSON AND A LSO TO ATTEND ALL WORKS RELATING TO REGISTRATION AT CONCERNED SUB-REGISTRAR OFFICE. BESIDES OTHER POWERS RELATING TO THIS PROPERTY WAS ALSO GIVEN TO THE ASSESSEE. WITHIN A PERIOD OF 1 MONTH THIS PROPERTY WAS SOLD THROUGH R EGISTERED SALE DEED TO P. VIJAYA RAMA RAJU FOR A SALE CONSIDERATION OF RS.12 LAKHS THROUGH REGISTERED SALE DEED. TRANSLATED COPY OF WHICH IS AVAILABLE A T PG.NO.28 TO 30 OF THE COMPILATION AND FROM THIS DOCUMENT IT IS EVIDENTLY CLEAR THAT ASSESSEE HAS ACTED AS AN AGENT OF THE ORIGINAL OWNER MR. L. SARV ESWARA PRASAD AND L. MANIKANTA VAMSI. THROUGH THIS SALE DEED THE PHYSI CAL POSSESSION OF THE PROPERTY WAS ALSO TRANSFERRED TO THE BUYER BY THE O RIGINAL OWNER. THEREFORE IN THE ENTIRE TRANSACTIONS ASSESSEE HAS ACTED AS A N AGENT OR A GENERAL POWER OF ATTORNEY OF THE ORIGINAL OWNER. THEREFORE HE W AS NOT BENEFITED BY ANY PAYMENT IF MADE OVER AND ABOVE TO THE DECLARED SALE CONSIDERATION. THEREFORE THE PROVISIONS OF SECTION 50C CANNOT BE INVOKED AGAINST THE ASSESSEES. EVEN IF IT IS TO BE INVOKED IT CAN ONL Y BE AGAINST THE ORIGINAL OWNER OF THE PROPERTY I.E. MR. L. SARVESWARA PRASAD AND L. MANIKANTA VAMSI. 6. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENT ED THAT ASSESSEE COULD NOT BECOME THE OWNER OF THE PROPERTY EVEN AS PER PROVISIONS OF SECTION 2(47)(V) OF THE I.T. ACT IN AS MUCH AS THE PHYSICAL POSSESSION OF THE PROPERTY WAS NOT TRANSFERRED OR GIVEN TO THE ASSESSEE. THE TITLE IN THE IMMOVABLE PROPERTY CAN ONLY BE TRANSFERRED EITHER THROUGH THE REGISTERED SALE DEED OR BY VIRTUE OF PROVISIONS OF SECTION 2(47)(V) OF THE INCO ME TAX ACT. 5 7. THE ASSESSEE HAS ALSO OFFERED THE LITTLE BIT COM MISSION EARNED ON THE SALE OF THIS PROPERTY AS AN INCOME WHICH WAS ACCEPT ED BY THE REVENUE AUTHORITIES. IN SUPPORT OF THIS CONTENTION HE HAS INVITED OUR ATTENTION TO THE STATEMENT OF TOTAL INCOME FILED ALONG WITH RETURN O F INCOME WHICH IS AVAILABLE AT PG.NO.2 OF THE COMPILATION OF THE ASSESSEES IN W HICH HE HAS OFFERED A COMMISSION AND BROKERAGE INCOME AT RS.27 000/-. TH E LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUED IN THE ALTERNATIVE THAT EVE N IF THE PROVISIONS OF 50C ARE TO BE INVOKED AGAINST THE ASSESSEES IN THAT CA SE THE COST OF THE ACQUISITION OF THE PROPERTY SHALL ALSO BE TAKEN AT RS.20 LAKHS AND ONLY THE DIFFERENCE OF RS.77 000/- CAN BE CONSIDERED AS AN I NCOME OF THE ASSESSEES. THERE CANNOT BE A TWO FAIR MARKET VALUE OF A PROPER TY OVER A SPAN OF ONE MONTH. 8. THE LD. D.R. ON THE OTHER HAND HAS PLACED A HEAV Y RELIANCE UPON THE ORDER OF THE CIT(A). IT WAS FURTHER CONTENDED ON B EHALF OF THE REVENUE THAT ASSESSEE HAS BECOME THE ABSOLUTE OWNER OF THE PROPE RTY ON THE BASIS OF THE SALE AGREEMENT-CUM-GENERAL POWER OF ATTORNEY AND AL SO ON PAYMENT OF ENTIRE SALE CONSIDERATION. THEREFORE THE A.O. HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 50C AGAINST THE ASSESSEES ON SALE OF PROPERTY. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ORDER OF THE AUTHORITIES BELOW AND DOCUMENTS PLACED ON RE CORD. THE SOLE ISSUE ARISEN BEFORE US IS WHETHER PROVISIONS OF SECTION 5 0C CAN BE INVOKED AGAINST THE ASSESSEE AND IF INVOKED WHAT WOULD BE THE CAPI TAL GAIN TO BE ASSESSED IN THE HANDS OF THE ASSESSEES? 9.1 WE HAVE CAREFULLY EXAMINED THE SALE AGREEMENT-C UM-GENERAL POWER OF ATTORNEY APPEARING AT PG.NO.14 TO 16 OF THE COMPILA TION EXECUTED BY L. SARVESWARA PRASAD AND L. MANIKANTA VAMSI ON 16.8.20 04 IN FAVOUR OF THE ASSESSEES ON RECEIPT OF RS.11 75 000/- THROUGH WHI CH THEY HAVE AUTHORIZED THE ASSESSEE TO EXECUTE THE SALE DEED IN FAVOUR OF ONE OR MORE PERSONS IN A SINGLE OR SEVERAL DOCUMENTS AND TO ATTEND FOR ALL W ORKS RELATING TO REGISTRATION AT CONCERNED SUB-REGISTRARS OFFICE. BESIDES OTHE R POWERS RELATING TO 6 EXECUTION OF SALE DEED AND RELATING TO THE PROPERTY WERE ALSO CONFERRED UPON THE ASSESSEES. IN THIS DOCUMENT IT HAS BEEN CATEGO RICALLY STATED THAT AT THE TIME OF EXECUTION OF THIS DOCUMENT THE POSSESSION WAS NOT GIVEN TO THE ASSESSEES AND THE POSSESSION WOULD BE GIVEN AT THE TIME OF REGISTRATION OF THE SALE DEED PERTAINING TO THE PROPERTY. BUT NO SA LE DEED WAS EXECUTED IN FAVOUR OF THE ASSESSEES BY THE ORIGINAL OWNER OF TH E PROPERTY. THEREFORE THERE IS NO EVIDENCE ON RECORD FROM WHICH IT CAN BE INFERRED THAT THE POSSESSION OF THE PROPERTY WAS HANDED OVER TO THE A SSESSEES. IN RESPECT OF THE IMMOVABLE PROPERTY THE TITLE OF THE PROPERTY C AN BE TRANSFERRED ONLY BY EXECUTION OF A REGISTERED SALE DEED OR AS PER PROVI SIONS OF SECTION 2(47)(V) OF THE I.T. ACT ACCORDING TO WHICH A PERSON CAN ALSO BE COME AN OWNER OF THE PROPERTY IF THE POSSESSION OF THE PROPERTY IS GIVE N TO HIM ALONG WITH THE EXECUTION OF THE POWER OF ATTORNEY AND SALE AGREEME NT. IN THIS TYPE OF CASES REGISTRATION OF THE SALE DEED IS NOT NECESSA RY BUT IN ANY CASE THE POSSESSION IS CONDITION PRECEDENT FOR INVOKING THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT. IN THE INSTANT CASE THE POSSE SSION WAS NOT HANDED OVER TO THE ASSESSEES THEREFORE THE ASSESSEE CANNOT BE CALLED TO BE THE OWNER IN VIEW OF THE PROVISIONS OF SECTION 2(47)(V) OF THE I. T. ACT. ADMITTEDLY THE SALE DEED WAS NOT EXECUTED IN FAVOUR OF THE ASSESSEES. THEREFORE THE TITLE OF THE PROPERTY WAS NOT TRANSFERRED IN FAVOUR OF THE ASSES SEES AND THE ASSESSEE CANNOT BE CALLED TO BE THE OWNER OF THE PROPERTY. 10. WE HAVE ALSO CAREFULLY PERUSED THE SALE DEED EX ECUTED BY THE ASSESSEE AS A POWER OF ATTORNEY OF L. SARVESWARA PR ASAD AND L. MANIKANTA VAMSI IN FAVOUR OF P. VIJAYA RAMA RAJU FOR A SALE C ONSIDERATION OF RS. 12 LAKHS. THE TRANSLATED COPY OF THE SALE DEED IS AVA ILABLE AT PG.NO.28 TO 30 OF THE COMPILATION. FROM A CAREFUL PERUSAL OF THE SAL E DEED ONLY ONE INFERENCE IS DRAWN THAT ASSESSEE WAS ACTING AS AN AGENT OR A GENERAL POWER OF ATTORNEY ON THE BASIS OF SALE AGREEMENT-CUM-GENERA L POWER OF ATTORNEY OF L. SARVESWARA PRASAD AND L. MANIKANTA VAMSI FOR EXE CUTING THE SALE DEED IN FAVOUR OF P. VIJAYA RAMA RAJU. SINCE THE ASSESSEE HAD ALREADY PAID A SUM OF RS.12 LAKHS TO THE ORIGINAL OWNERS AT THE TIME OF E XECUTION OF THE SALE AGREEMENT-CUM-GENERAL POWER OF ATTORNEY HE RETAINE D THE SALE CONSIDERATION OF RS.12 LAKHS WITH HIMSELF AND IN THIS RETENTION WE DO NOT FIND ANY ILLEGALITY. 7 11. NOW THE QUESTION ARISES AS TO AGAINST WHOM THE PROVISIONS OF SECTION 50C CAN BE INVOKED? WE THEREFORE CAREFULLY EXAMINE D THE PROVISIONS OF SECTION 50C OF THE ACT AND THE SAME IS EXTRACTED HE REUNDER FOR THE SAKE OF REFERENCE: 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCR UING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED. [OR ASSESSABLE] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE STAMP VALUATION AU THORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL FOR THE PURPOSES OF SECTION 48 BE DEEMED TO BE THE FULL VA LUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1) WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFIC ER THAT THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE ST AMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MA RKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABL E] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY COURT OR THE HIGH COURT . THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE THE PROVISIONS OF SUB-SECTIONS(2) (3) (4) (5) AND (6 ) OF SECTION 16A CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTION (6) A ND (7) OF SECTION 23A SUB-SECTION (5) OF SECTION 24 SECTION 34AA S ECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT 1957 (27 OF 1957) SHALL WITH NECESSARY MODIFICATIONS APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. [EXPLANATION 1].FOR THE PURPOSES OF THIS SECTION VALUATION OFFICER SHALL HAVE THE SAME MEANING AS IN CLAUSE ( R) OF SECTION 2 OF THE WEALTH-TAX ACT 1957 (27 OF 1957). [EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION T HE EXPRESSION ASSESSABLE MEANS THE PRICE WHICH THE STAMP VALUAT ION AUTHORITY WOULD HAVE NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE ADOPTED OR ASSESSED IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY] 8 (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2) WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VA LUATION AUTHORITY REFERRED TO IN SUB-SECTION (1) THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER.] 12. AS PER PROVISIONS OF SECTION 50C CAPITAL GAIN I S TO BE CONSIDERED IN THE HANDS OF THE TRANSFEROR WHO TRANSFERRED THE IMMOVAB LE PROPERTY BY EXECUTING THE SALE DEED. IN THE IMPUGNED SALE DEED THE ASSES SEE HAD ACTED ONLY AN AGENT BUT THE TRANSFEROR WAS L. SARVESWARA PRASAD A ND L. MANIKANTA VAMSI. THEREFORE THE PROVISIONS OF SECTION 50C CAN ONLY B E INVOKED AGAINST THE ORIGINAL OWNERS AND NOT AGAINST THE ASSESSEES. SIN CE THE REVENUE HAS WRONGLY INVOKED THE PROVISIONS OF SECTION 50C AGAIN ST THE ASSESSEES WE FIND NO MERIT IN ADDITIONS OF SHORT TERM CAPITAL GAIN MA DE IN THE HANDS OF THE ASSESSEES. 13. WE HAVE ALSO EXAMINED THE ALTERNATIVE CONTENTIO NS OF THE ASSESSEES THAT IF THE DEEMED SALE CONSIDERATION IS TO BE TAKE N INTO ACCOUNT ON THE BASIS OF FAIR MARKET VALUE DETERMINED BY THE AUTHORITY OF THE STATE GOVERNMENT FOR THE PURPOSE OF STAMP DUTY THE SAME VALUE SHOULD BE ADOPTED AS COST OF ACQUISITION IN THE HANDS OF THE ASSESSEES. WE FIND FORCE IN THIS CONTENTION OF THE ASSESSEES AS THERE CANNOT BE TWO FAIR MARKET VA LUE OF A PROPERTY WITHIN A PERIOD OF ONE MONTH. IF THAT BE THE CASE THE DIFFE RENCE OF RS.77 000/- CAN ONLY BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF SHORT TERM CAPITAL GAIN. BUT IN ANY CASE THE ASSESSEE HAS ALREADY OFFERED A SUM OF RS.27 000/- AS A COMMISSION AND BROKERAGE. WE THEREFORE FIND NO JU STIFICATION IN MAKING A FURTHER ADDITIONS IN THE HANDS OF THE ASSESSEES. W E THEREFORE DO NOT FIND OURSELVES IN AGREEMENT WITH THE ORDER OF THE CIT(A) . ACCORDINGLY WE SET ASIDE HIS ORDER AND DELETE THE ADDITIONS MADE IN TH E HANDS OF THE ASSESSEES. 9 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON 7.9.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 7 TH SEPTEMBER 2010 COPY TO 1 KOTHA DURGA SRINIVAS D.NO.23-3-17A OPP. MARUTHI VYAYAMASALA SATYANARAYANAPURAM VIJAYAWADA-11. 2 ITO WARD-2(4) VIJAYAWADA 3 THE CIT VIJAYAWADA 4 THE CIT(A) VIJAYAWADA 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM