|The Tax Publishers2020 TaxPub(DT) 5211 (Del-Trib)
INCOME TAX ACT, 1961
Provisions of section 50C will not be applicable while computing capital gain on transfer of leasehold rights in land and plot.
Capital gains - Applicability of section 50C - Transfer of leasehold rights in land -
Assessee was allotted leasehold right of a plot of land. The said plot was sold for Rs. 20,00,000 and the circle rate of plot as per stamp duty rate was Rs. 42,10,000. However, the assessee opted for showing the capital gain on the same by adopting the sale consideration as per sale deed of Rs. 20 lakhs and supported it by a market value certification from registered valuer. AO noted that provisions of section 50C would apply in the case. Assessee submitted that the market value of the property was very low as compared to the circle rate. However, the AO rejected the submission of the assessee and substituted the sale consideration of Rs. 20 lakhs by the stamp duty valuation under section 50C of the property at Rs. 4210000 and accordingly, short-term capital gain was worked out. Assessee submitted that the provisions of section 50C would not extend to the transfer of leasehold right. Held: Provisions of section 50C will not be applicable while computing capital gain on transfer of leasehold rights in land and plot. Accordingly, the AO was directed to delete the addition made under section 50C.
REFERRED : CIT v. Greenfield Hotels & Estates Pvt. Ltd. (2016) 389 ITR 68 (Bom-HC) : 2016 TaxPub(DT) 4861 (Bom-HC), Ritz Suppliers Pvt. Ltd. v. ITO (2020) 182 ITD 227 (Kol-Trib) : 2020 TaxPub(DT) 395 (Kol-Trib), Pyaribai K. Jain v. Addl. CIT (2019) 175 ITD 177 (Mum-Trib) : 2019 TaxPub(DT) 1042 (Mum-Trib) and Kancast Pvt. Ltd. v. ITO (2015) 68 SOT 110 (Pune-Trib) : 2015 TaxPub(DT) 1580 (Pune-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2016-17
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