ACIT Vs. Everest Industries Ltd. (ITAT Mumbai)
1. The only grievance of the revenue in this appeal is that the provisions of section 50C of the Act mandates that where a transfer of capital asset being land or building or both is for consideration less then its value as adopted/assessed by the State Government for the purpose of stamp duty then the stamp duty value would be adopted as being the full value of consideration for computing capital gains arising out of transfer of the asset. It is the case of the revenue that section 50C of the Act would apply also to transfer of leasehold interest in land and is not limited to only to transfer of land and building or both.
The impugned order of the Tribunal allowed the respondent – assessee’s appeal by following its own decision in Atul G. Puranik v. ITO 58 DTR 208on identical issue. The Tribunal in Atul G. Puranik (supra) held that section 50C of the Act would apply only to a capital asset being land or building or both and it cannot apply to transfer of lease rights in a land.
2. Without analyzing scheme under which sales tax subsidy was granted the same cannot be decided whether it was capital or revenue receipt.
3. AO cannot make a reference to DVO for purpose of valuation where the value of capital asset declared by assessee, was not less than fair market value (FMV).
4. Intention behind section 54G is clear that assessee should invest sale proceeds of sale of specified asset in industrialization or should deposit the same in bank account thus on piece-meal purchase of plant and machinery deduction can be claimed by assessee.
5. The expression new machinery is to be construed as referring to condition that at the time of acquisition or installation plant and machinery should be new therefore, additional depreciation under section 32(1)(iia) was to be allowed on installing machinery any time.
6. When foreign exchange fluctuation gain would be taxed, on same premise, foreign exchange loss must be allowed.
