Ajay Kumar Mittal, J. - (1.) This appeal has been preferred by the appellant -assessee Sec. 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 30.4.2010, Annexure A. 3 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal") in ITA No. 471 (ASR)/2009 for the assessment year 2006 -07. It was admitted on 17.7.2012 to consider following substantial question of law: - "Whether the Tribunal has erred in law by failing to appreciate that as the 'Pre -amended' deeming provisions of Sec. 50C of the Income Tax Act, 1961 (i.e. those as were available on the statute upto 30.9.2009) did not take within its purview 'Agreement to Sell', therefore the authorities below were in error in computing the 'Capital gains' in the hands of the appellant firm by applying the provisions of Sec. 50C -
(2.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The appellant firm was running a rice mill at Moga under the name and style of M/s. Guru Dashmesh Rice and General Mills. It executed an agreement to sell dated 3.11.2004 in the financial year 2004 -05 with regard to land measuring 24 kanals 4 marlas, 6 Sarsai for a total sale consideration of Rs. 12,80,000/ -. Earnest money of Rs. 2 lacs was received while balance was to be received at the time of execution of the registered deed by not later than 30.5.2005. As per the said agreement to sell, the appellant firm was to vest the legal title of whole of the aforesaid property vide two sale deeds in favour of the purchaser. Pursuant to the said agreement, the appellant firm executed sale deed as on 27.12.2004 in the financial year 2004 -05 and pursuant whereto absolute internal and external rights, right to passage alongwith title as regards part of the land measuring 6 kanals 1 marla 4 sarsai out of the said land stood vested in favour of the purchaser. During the financial year 2005 -06 relevant to the assessment year 2006 -07, the appellant executed another sale deed on 10.5.2005 in respect of the balance land measuring 18 kanals 3 marlas 2 Sarsai against a pre -settled sale consideration of Rs. 9,30,000/ - as per the terms of the agreement. Thus, long term capital gain of Rs. 2,72,925/ - was calculated by the assessee and taxes were paid on the same. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 21.8.2009, Annexure A. 2, the CIT(A) partly allowed the appeal sustaining the findings of the Assessing Officer with regard to applicability of the provisions of Sec. 50C of the Act to the appellant firm. Still not satisfied the assessee filed appeal before the Tribunal. The Tribunal vide order dated 30.4.2010, Annexure A. 3 partly allowed the appeal upholding the findings recorded by the CIT(A). Hence the instant appeal by the assessee.
(3.) Learned counsel for the appellant assessee raised two -fold submissions to assail the order of the Tribunal. Firstly, it was contended that Sec. 50C of the Act cannot be made applicable on the basis of sale deed dated 10.5.2005. It was further submitted that agreement to sell is dated 3.11.2004 and therefore by virtue of Explanation 2 to Sec. 2(47) of the Act, it could not be taxed in the assessment year 2006 -07.;