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<h1>Capital gain not taxable in A.Y. 2007-08 as Tribunal rules transfer date in 2004.</h1> The Tribunal upheld the decision of the Ld. CIT (A) in dismissing the revenue's appeal, ruling that the capital gain could not be taxed in A.Y. 2007-08. ... - Issues Involved:1. Taxability of capital gain in A.Y. 2007-08.2. Applicability of section 50C of the Income Tax Act.Summary:Issue 1: Taxability of Capital Gain in A.Y. 2007-08The revenue challenged the order of the Ld. CIT (A)-27, Mumbai, which directed the addition of Rs. 68,45,651/- as Long Term Capital Gain (LTCG) and accepted that the Tenancy Right got converted into ownership right as per the consent decree dated 28.05.1999, not in A.Y. 2007-08 when the agreement for giving ownership right was registered through a transfer deed. The revenue contended that the assessee tenant surrendered/exchanged/transferred the Tenancy Right acquired for Rs. 9 lakhs with ownership right worth Rs. 1,13,49,000/- on 22.02.2007, not on 28.05.1999 when the consent decree was passed.The A.O. held that the Deed of confirmation registered on 22.02.2007 constituted a transfer within the meaning of section 45(1) r.w. sec. 2(47) of the I.T. Act, making the LTCG taxable in A.Y. 2007-08. The Ld. CIT (A) disagreed, stating that the ownership was acquired as per the Consent Decree dated 28.05.1999, and thus, the capital gain could not be taxed in A.Y. 2007-08. The Tribunal upheld the Ld. CIT (A)'s decision, confirming that the transfer took place on 04.11.2004 when the agreement in compliance with the Consent Decree was executed, not on 22.02.2007.Issue 2: Applicability of Section 50CThe revenue argued that the Ld. CIT (A) erred in applying section 50C, whereas the exchange/surrender/transfer value was taken at Rs. 1,13,49,000/- by applying sections 2(47), 45, 50C, 55, and 112, not just section 50C. The Tribunal found this ground infructuous as it held that no transfer occurred in A.Y. 2007-08, rendering the applicability of section 50C irrelevant.Conclusion:The Tribunal dismissed the revenue's appeal, confirming that the capital gain could not be taxed in A.Y. 2007-08 and that section 50C was not applicable. The order was pronounced in the open court on 18th January 2012.
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