Tribunal rules no application of sec 50C to leasehold transfer. Property valuation upheld. Revenue appeal dismissed.

The Tribunal held that section 50C of the Income Tax Act did not apply to the transfer of lease hold property. It was established that the valuation of the property was correctly determined by the Ld.CIT(A), and there was no undervaluation in the transaction. Consequently, the appeal by the Revenue was dismissed, and the order of the lower authority was upheld on June 7, 2013.

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Issues:
- Applicability of section 50C of the Income Tax Act for calculating long term capital gain.
- Valuation of lease hold property for tax purposes.

Analysis:
1. Applicability of section 50C:
The appeal involved a dispute regarding the applicability of section 50C of the Income Tax Act for calculating long term capital gain. The assessee had sold a lease hold property, and the question was whether the provisions of section 50C applied to the transaction. The First Appellate Authority held that section 50C was not applicable as the transfer was of lease hold property, and there was no involvement of the Stamp Valuation Authority. The Tribunal analyzed relevant case laws, including the Carlton Hotels case and the Atul G.Puranik case, which emphasized that section 50C applies only to 'land or building or both' and not to lease rights in a land. Referring to the DyCIT vs. Tejender Singh case, the Tribunal concluded that section 50C would not be invoked in the case of lease rights transfer. Therefore, the Tribunal upheld the order of the First Appellate Authority on this issue.

2. Valuation of lease hold property:
Additionally, the Tribunal considered the valuation of the lease hold property for tax purposes. The Ld.CIT(A) had determined that the rate of Rs.4500/- per sq. feet was for a standard period of 90 years, whereas the lease rights transferred were for 54 years. The Ld.CIT(A) calculated a proportionate rate of Rs.2700/- per sq. feet, and since the transfer was made at Rs.3181/- per sq. feet, there was no undervaluation. The Ld.DR did not dispute this working. Consequently, the Tribunal found no undervaluation in the transaction based on the valuation provided by the Ld.CIT(A). Therefore, the appeal by the Revenue was dismissed, and the order of the lower authority was upheld.

In conclusion, the Tribunal held that section 50C did not apply to the transfer of lease hold property and that the valuation of the property was correctly determined by the Ld.CIT(A). The appeal by the Revenue was dismissed, and the order was pronounced on 7th June, 2013.

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