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II. Useful Case Laws:
1. CIT Vs. Khoobsurat Resorts Pvt. Ltd., ITA No. 776/2011, Dated: 05-11-2012, High Court of Delhi
Whether the assessee is required to pay stamp duty on a higher value, which is more than the consideration disclosed in the sale deed within the scope of Section 50C?
Held that the provision of Section 50-C enabling the revenue to treat the value declared by anassessee for payment of stamp duty, ipso facto, cannot be a legitimate ground for concluding that there was undervaluation, in the acquisition of immovable property. If Parliamentary intentionwas to enable such a finding, a provision akin to Section 50-C would have been included in the statute book, to assess income on the basis of a similar fiction in the case of the assessee who acquires such an asset. No doubt, the declaration of a higher cost for acquisition for stamp duty might be the starting point for an inquiry in that regard; that inquiry might extend to analyzingsale or transfer deeds executed in respect of similar or neighboring properties, contemporaneously at the time of the transaction.
Yet, the finding cannot start and conclude with the fact that such stamp duty value or basis is higher than the consideration mentioned in the deed. The compulsion for such higher value, is the mandate of the Stamp Act, and provisions which levy stamp duty at pre-determined or notified dates. In the present case, the revenue did not rely on any objective fact or circumstances; consequently, the Court holds that there is no infirmity in the approach of the lower authorities and the Tribunal, granting relief to the assesse. This question is accordingly answered in favourof the assessee, and against the revenue.
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2. M/S. Gail India Limited Vs JCIT, ITA No. 956/2011 and 957/2011, Pronounced on: 05.11.2012, High Court of Delhi
Whether the premium/lump sum amount paid in lieu of payment of annual rent for taking land on a long lease would be deductible as rent under Section 30 of the Income Tax Act, 1961?
Held that the arrangements do not confer outright ownership rights to the lessee is besides the point as the enjoyment of the land as a lessee in such cases is substantially that of the owner itself. In other words, barring the right to alienate or outright sale of the property in unqualified manner, all rights of enjoyment in respect of leased properties are with the assessee.
Furthermore, even though the stipulation in the deed – one of which (dated 25.07.1995 with MHIDC) was produced during the hearing by the assessee, clause 3(m) enjoins the lessee not to transfer either directly or indirectly, sell or encumber the lease benefits to any other party, the same stipulation enables transfer with “previous consent in writing of the Chief Executive Officer”. This Court is also further conscious of the fact that the conditions embodied in such lease deed are part of the general policies consciously adopted by the municipal and statutory authorities who manage and lease out such assets. In view of the above conclusion, the questions of law are answered against the assessee and in favour of the Revenue.
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