Case Law Details
From the reading of Sec. 50C,it is evident that Sec. 50C is a deeming provision and it extends to only to land or building or both. Section 50C can come into play only in a situation where the consideration received or accruing as a result of the transfer by an appellant of a capital asset, being land or building or both is less than the value adopted or assessed or assessable by any authority of State Government therefore for the purpose of payment of stamp duty in respect of such transfer.
It is settled legal proposition that deeming provision can be applied only in respect of the situation specifically given and hence cannot go beyond the explicit mandate of the section. Clearly therefore, it is essential that for application of Sec.50C that the transfer must be of a capital asset, being land or building or both. If the capital asset under transfer cannot be described as “land or building or both” then section 50C will cease to apply. From the facts of the case narrated above, it is seen that the assessee has transferred booking rights and received back the booking advance. Booking advance cannot be equated with the capital asset and therefore section 50C cannot be invoked.
It Relied on the Judgment in the case of DCIT Vs. Tejinder Singh decided by ITAT Kolkata which held that Section 50C does not apply to transfer of tenancy/ leasehold rights
INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD
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Tentative:
On the narrated facts, as under stood, the pint of issue has been decided in the assessee’s favour on the limited ground that the deeming provisions of section 50C , in terms, are of no application. However, having regard to the special definitions in the Act of the two relevant terms ‘ capital asset’ and ‘transfer’, the gains arising from the transaction , according to a view, could be rightly taken to be chargeable under the head of ‘capital gains’.
It came to be observed that, a contrary view, with no reservation, has been recently propounded in certain quarters to the effect that the gains from any such transaction would be charged under the head of ‘income from other sources’ , not as ‘capital gains’. That, prima facie, does not sound right; in any case, is clouded with a grave doubt,; suffers from flawed logic.