Case Law Details
CIT Vs Abdul Aziz Abdul Kadar (Bombay High Court)
The Bombay High Court dismissed the Revenue’s appeal in CIT Vs Abdul Aziz Abdul Kadar, ruling that the provisions of Section 50C of the Income Tax Act, 1961, do not apply to the transfer of tenancy rights. The appeal was filed under Section 260A of the Act, challenging the Income Tax Appellate Tribunal’s (ITAT) order dated February 15, 2013, for the Assessment Year 2007-08. The key issue was whether the Assessing Officer was correct in substituting the stamp duty valuation for tenancy rights under Section 50C, which is generally applicable to transfers of land or buildings.
The ITAT relied on its earlier ruling in Shri Atul G. Puranik Vs. ITO, which held that tenancy rights do not constitute “land or building or both” and are therefore outside the scope of Section 50C. The Revenue acknowledged that it had accepted this decision and had not appealed against it. Given this, the High Court concluded that the case did not raise any substantial legal question and dismissed the appeal without imposing costs. This ruling reaffirms that Section 50C applies strictly to immovable property involving land and buildings, excluding tenancy right transfers.
Read ITAT Order: Section 50C Inapplicable to Tenancy Transfers: ITAT Mumbai
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. This appeal under Section 260A of the Income Tax Act,1961 (the Act), challenges the order dated 15 February 2013 passed by the Income Tax Appellate Tribunal (the Tribunal) for the Assessment Year 200708.
2. The Revenue urges the following questions of law for our consideration:
“(i) Whether, on the facts and in the circumstances of the case and in law, the Tribunal has rightly decided that Assessing Officer has wrongly substituted the value adopted or assessable stamp valuation authority only in respect of land or building or both cannot be extended or extrapolated to the transaction of transfer of the tenancy rights under the provisions of Section 50C of the Income Tax Act ?
(ii) Whether, on the facts and in the circumstances of the case and in law, the Tribunal has rightly interpreted the Section 50C of the Income Tax while dismissing the appeal of the Revenue ?
3. We find that the impugned order of the Tribunal dismissed the Revenue’s appeal inter alia holding that the provisions of Section 50C of the Act would not be attracted in case of transfer of tenancy The impugned order placed reliance upon its own decision in “Shri.Atul G.Puranik Vs. ITO 12(1)(1) vide ITA No.3051/M/2010 decided on 13 May 2011. The Tribunal in case of “Shri.Atul G.Puranik” (supra) had held that transfer of tenancy rights is neither ‘a land or building or both’ and thus would not be covered under Section 50C of the Act. Mr.Malhotra, learned Counsel for the Revenue very fairly states that the Revenue has accepted the decision in the case of “Shri.Atul G.Puranik”(supra) inasmuch as no appeal has been preferred against the said order.
4. In the above view of the matter, the questions as raised do not raise any substantial question of law. Accordingly, the appeal is dismissed. No order as to costs.
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