M/s. Magmo Textiles Equipment Pvt.Ltd. Vs ITO (ITAT Mumbai)
In our opinion,to claim benefit of section 50 of the Act ,issuance of an allotment letter from a builder or developer is not sufficient.On 09.02.2011,the assessee had made payment of Rs.44.01 lakhs. Second installment was to paid on completion of first floor.It means at the time of making the payment the asset in question was not existing.It is said that deeming provisions had to be construed strictly.Courts are of the opinion that the language of a taxing statute should ordinarily be read and understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative animation. A taxing statute should be strictly construed common sense approach, equity, logic, ethics and morality have no role to play. Nothing is to be read in, nothing is to be implied ; one can only look fairly at the language used and nothing more and nothing less. Section 50,being a deeming provision,has to be interpreted only for the said issue for which it has deemed and the manner in which the deeming has been contemplated to be restricted in the manner sought to be deemed.In our opinion,the wordings of the section do not indicate in any manner that a mere allotment letter of asset would make the allottee entitled to claim STCG.Therefore,we hold that claim made by the assesee-that an allotment letter from developer is equal to acquisition of an asset-is not tenable,especially when it had not submitted the basic documents like approval of Municipal/ Panchayat authorities approving the plan of the proposed gala or the commencement certificate.Even for the sake of argument,it is presumed that the developer had the requisite permissions,it would not entitle the assessee to claim benefit of section 50.It has claimed deduction for non-existent asset.So,we hold that order of the FAA does not suffer from any legal infirmity.
