Case Law Details
Tribunal has held that in case the income is to be computed as per sub-section (1A) of section 11 of the Act, if the net consideration for transfer of capital asset of a charitable trust is utilized for acquiring new capital asset, then the whole of the capital gain is exempt. It was further contended that the ld. CIT(A) has adjudicated the issue in the light of the relevant provisions of the Act and also various judicial pronouncements. The relevant observations of the Tribunal are as under-
6.1 From the order of CIT(A), we find that the assessee is a charitable and religious trust registered u/s 12A of the Act. It is also noted by the Assessing Officer that the assessee has sold immovable property for total sale consideration of Rs.2.25 lac and the entire sale consideration was invested in other capital asset i.e. fixed asset with bank. The Assessing Officer invoked the provisions of section 50C of the Act and computed the capital income at Rs.66.38 lac based on the value adopted by stamp duty authorities for stamp duty purposes. We find that the CIT(A) has decided this issue in favour of the assessee by following the Tribunal decision in the case of Gyanchand Batra vs. Income Tax Officer 115 DTR 45 (JP-Trib).
6.2 We also find that it is specifically mentioned in section 50C(1) of the Act that the stamp duty value is to be considered as full value of consideration received or accruing as a result of transfer for the purpose of section 48 of the Act. It is true that the assessee is a charitable trust and the income of the assessee has to be computed u/s 11 of the Act. As per sub section (1A) of section 11 of the Act, if the net consideration for transfer of capital asset of a charitable trust is utilized for acquiring new capital asset, then the whole of the capital gain is exempt. Considering all these facts, we do not find any reason to interfere in the order of CIT(A) on this issue.
6.3 Regarding the reliance placed by Learned D.R. of the Revenue on the judgment of Hon’ble Kerala High Court rendered in the case of Lissie Medical Institutions Vs Commissioner of Income-tax (supra), we find that in that case, it was held by Hon’ble Kerala High Court that claim of depreciation is not allowable on the assets which were considered as application of income at the time of acquisition of assets. In our considered opinion, this judgment is not relevant in the present case.
6.4 As per the above discussion, we find that no interference is called for in the order of CIT(A).
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