Hon’ble Tarun Agarwala, J.—The present appeals relate to the assessment years 2003-04 and 2004-05. All the appeals involve the same question of law and are being disposed of by a common order. All the appellants are co-owners of a land situate at khasra No. 634 at village Artoni, Mathura Road, Agra. The land was mortgaged with State Bank of India, Agra, for the loan taken by the firm M/s Mehra Off Set Press in which the assessees were partners. On account of the non-payment of the outstanding dues, the Bank filed a civil suit for recovery of the amount and pendente lite interest. The suit was subsequently transferred to the Debt Recovery Tribunal. During the pendency of the proceedings, One Time Settlement was arrived at, on the basis of which, the assessees negotiated and entered into an agreement on 4.7.2001 with subsequent purchaser to sell the land at Rs. 34,71,750/- per hectare. In furtherance of the said agreement, the assessees received part consideration through which the liabilities of the State Bank of India were cleared and upon receiving the payment the Bank lifted the encumbrances and released the mortgaged property on 21.11.2001. The sale-deed was eventually executed in April, 2003.

2. All the assessees filed their separate return, which was processed under under Section 143(1) of the Act. In the return, the assessees showed the income received from salary, income from other sources and long term capital gains. Subsequently, the assessees received a notice under Section 148 of the Act to show-cause as to why the assessment should not be reopened and why capital gains should not be assessed as per provisions of Section 50C of the Act. The Assessing Officer reopened the proceedings and reassessed the income computing the long term capital gains on the basis of Section 50C of the Act taking the value assessed by the local authority.

3. The assessees, being aggrieved, filed separate appeals, which were allowed by the Ist appellate authority holding that capital gains was not taxable for the assessment year under appeal and the amount of capital gains assessed was deleted. The Ist appellate authority held that the provisions of Section 50C was not applicable. The Department, being aggrieved, filed an appeal before the Tribunal, which was dismissed. Consequently, the present appeals have been filed by the Department under Section 260(A) of the Act, which were admitted on the following substantial question of law:

“Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is legally justified in confirming the findings of the learned CIT (A) holding that the agreement to sell the land under consideration was made on 4.7.2001, prior to insertion of Section 50C of I.T.Act,1961 ignoring the fact that the sale-deed was executed in April, 2003, the sale consideration agreed upon was paid in April, 2003 and the possession of the land was handed over to the transferee after execution of Sale-deed?”

4. We have heard S.D.Singh, the learned Senior Counsel assisted by Sri Aditya Pandey, the learned counsel for the assessee and Sri Krishna Agrawal, the learned counsel for the Department.

5. Effectively, the issue which is to be considered is whether the provisions of Section 50C of the Act is applicable in the case of the assessees’ or not.

6. Section 50C of the Act was inserted w.e.f. 1.4.2003. For facility, the said provision is extracted hereunder:

“50C. (1) Where the consideration received or accruing 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 authority”) 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 value of the consideration received or accruing as a resul