Generate professional replies to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Step 1 – Issue Identification & Review
The AI analyses your query, notice, order, or uploaded documents and identifies the key issues involved.
• Review the issues identified by the AI • Add, edit, remove, or refine issues as required
Step 2 – Draft Generation
Once you approve the issues, the AI performs issue-wise legal research and prepares a structured draft response.
• Relevant statutory provisions • Judicial precedents and Supreme Court, High Court and other citations • Issue-wise legal analysis • Practical arguments and supporting content • Professionally structured draft ready for further review.
Income Tax Tribunal: Section 50C doesn't apply to sale of rights to purchase unconstructed flats The Tribunal held that Section 50C of the Income Tax Act does not apply to the sale of rights to purchase unconstructed flats as it is a deeming provision ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Income Tax Tribunal: Section 50C doesn't apply to sale of rights to purchase unconstructed flats
The Tribunal held that Section 50C of the Income Tax Act does not apply to the sale of rights to purchase unconstructed flats as it is a deeming provision that applies only to land or building. Since the assessee had only sold rights in the property and not land or building itself, Section 50C could not be invoked. Therefore, the appeal was allowed, and the order was pronounced in open court on 04/07/2018.
Issues: Application of Section 50C of the Income Tax Act on sale of unconstructed flats.
Analysis: The appeal was filed by the assessee against the order of the Commissioner of Income-tax (Appeals) under Section 258 of the Income Tax Act, 1962. The main issue for consideration was whether Section 50C of the Act would apply in the case where the assessee sold rights to purchase unconstructed flats. The assessee had entered into an agreement to purchase unconstructed flats and later sold the rights to purchase these flats to other parties. The Assessing Officer invoked Section 50C, claiming that the market value determined by the Registration authority should be applied since the assessee had sold the flats. However, the assessee argued that Section 50C should not apply as no land or building was transferred, only rights in the property were sold.
The Tribunal referred to a previous decision by the ITAT 'B' Bench of Ahmedabad Tribunal in a similar case and held that Section 50C is a deeming provision that applies only to land or building or both. It emphasized that for Section 50C to apply, the transfer must be of a capital asset, being land or building or both. Since the assessee had transferred booking rights and received booking advance, which cannot be equated with a capital asset like land or building, Section 50C could not be invoked. Therefore, the Tribunal concluded that Section 50C does not apply in this case as what was sold was the right in the property and not land or building. Consequently, the appeal of the assessee was allowed, and the order was pronounced in open court on 04/07/2018.
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