Recently ITAT Mumbai in the case of ITO Vs. United Marine Academy (Mumbai ITAT) held that Assessing Officer thus was right in applying the provision of section 50C to the transfer of depreciable capital assets covered by section 50 and in computing the capital gain arising from the said transfer by adopting the stamp duty valuation.
There are two deeming fictions created in section 50 and section 50C. The first deeming fiction modifies the term ‘cost of acquisition’ used in section 48 for the purpose of computing the capital gains arising from transfer of depreciable assets whereas the deeming fiction created in section 50C modifies the term “full value of the consideration received or accruing as a result of transfer of the capital asset” used in section 48 for the purpose of computing the capital gains arising from the transfer of capital asset being land or building or both. The deeming fiction created in section 50-C thus operates in a specific field which is different from the field in which section 50 is applicable. The two deeming fictions operate in different fields and there is no conflict between them. As s. 50C was inserted to prevent assessee’s indulging in under-valuation, there is no logic why it should not be applied to a depreciable building;
Full Judgment is as follows
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH ‘F’, MUMBAI (SPECIAL BENCH )
Before Shri D. Manmohan, Vice-President, Shri P.M. Jagtap, AM &
Shri N.V. Vasudevan, JM
I.T.A. No. 968/Mum/2007 Assessment Year :2003- 04
