Case Law Details
ITO Vs. Southern Steel Ltd. (ITAT Hyderabad)
The moot point in this case is whether Sec. 5OC can be invoked when the purchaser is a government undertaking i.e, Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC). In the real estate business it is prevalent that the substantial part of the consideration is unaccounted. In order to tax this unaccounted portion of consideration deeming provision was introduced as Section 5OC wherein when the consideration is less than stamp duty value, such stamp duty value is to be treated as full value consideration for the purpose of capital gain.
However, in the instant case the sale transaction was carried out by IDBI by way of public auction and the property was purchased by a government entity namely Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC). In this circumstances, I consider that it is too much to impute that APIIC paid unaccounted money. Further as per the sale deed dated 17-5-2011 the APIIC paid Rs. 12 crores to IDBI bank which is again a public sector undertaking. Therefore the entire transaction took place between two government entities where there is no scope for payment of any unaccounted money.
In this back ground it is pertinent to mention the decision of Krishi Utpanna Bazaar Samitee Vs DCIT in ITA 2043/PN/2012 dtd 20-3-20 14. The facts in this case were, the assessee Krishi Utpanna Bazaar Samitee was a state body of a Govt. of Maharashtra. It sold two properties in a public auction and received an amount of Rs.91,00,000/- and Rs. 15,51,000/-. The stamp duty value of these properties were Rs. 26, 14,,000/- and Rs.26, 14,000/- respectively, and the same value was adopted for 5OC purpose. While adjudicating the issue, the Hon’ble Pune Tribunal observed that the Govt. Maharashtra issued a circular dated 30/06/2005 wherein it was stated for the purpose of stamp duty the value to be adopted is the amount recovered in public auction. The facts in the above case are identical to that of appellant case. Keeping in view the above discussion when the property was purchased by the government entity in public auction for an amount of Rs. 12 crores. The Assessing Officer cannot adopt the sale consideration at Rs.21,88,97,000/- and invoke Section 5OC. In such circumstances when the consideration actually received was Rs. 12 crores and there is no scope for payment of any unaccounted money, the provisions of Section 5OC cannot be invoked.
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