Case Law Details
Noida Cyber Park Pvt. Ltd. Vs ITO (ITAT Delhi)
Section 50C(1) of the Act, in so far as it is relevant for our purpose, prescribes that where the sale consideration received or accruing as a result of the transfer by an assessee of a capital asset, being ‘land or building or both‘, is less than value adopted by the Stamp Valuation Authority for the purposes of payment of stamp duty, then the value so adopted by the Stamp Valuation Authority be deemed to be the full value of the consideration received or accruing as a result of the transfer for the purposes of computing Capital Gains in the hands of the seller u/s 48 of the Act. Before us, the case sought to be made out by the assessee is that Section 50C, being a deeming provision, has to be strictly interpreted, a proposition which is quite acceptable; and, according to the assessee, Section 50C(1) covers a capital asset being “land or building or both” whereas in the instant case, what is transacted is merely leasehold rights in land and building, which is a distinct ‘Capital Asset’. The distinction sought to be made by the assessee is well-founded, and such distinction can be gauged from the Act itself.
Ostensibly, in Section 54D(1) of the Act, the ‘capital asset’ has been understood to be ‘land or building or any right in land or building’, thereby supporting the distinction sought to be canvassed before us. On the contrary, the phraseology in section 50C(1) of the Act only covers ‘land or building or both’ and does not refer to “any right in land or building”.
Thus, the expression ‘land or building’ in its coverage is quite distinct from the expression ‘any right in land or building’. The legislature, in its wisdom, has used the expression ‘land or building or both’ in Section 50C(1) of the Act, and not the expression ‘any right in land or building’. Therefore, the express use of one expression would exclude the other, a legal premise which is supported by the judgment of Hon’ble Supreme Court in the case of GVK Industries Ltd. Vs. ITO – (2011) 4 SCC 36 (SC). In this view of the matter, in our considered opinion, the point sought to be raised by the assessee deserves to be upheld. Such a distinction also has found approval of the Hon’ble Bombay High Court in the case of C.I.T. vs Greenfield Hotels & Estates Pvt. Ltd. (supra) and other Tribunal decisions which have been referred to in the earlier part of this order. Apart from that, we find that a recent decision of our Coordinate Bench in the case of of Manish Traders vs ITO in ITA No. 4481/D/2016 dated 22.7.2019 (reported in 2019 (7) TMI 1268 – ITAT Delhi has observed that assessee’s leasehold right for a period of 90 years in question is a capital asset to which provisions contained u/s 50C are not applicable.
In view of the aforesaid factual position and in law, we find that the present transaction of six properties in question does not warrant invoking of section 50C(1) of the Act as the property in question is not of the nature covered by section 50C(1) of the Act. Therefore, on this point itself, we set aside the order of the ld. Commissioner of Income Tax(A) and direct the Assessing Officer to delete the addition.
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