TaxTMI 
TaxTMI 
2014 (2) TMI 1212
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....he refer the matter to the Valuation Officer. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by referring the matter to Valuation Officer. 2.1 During the course of hearing, the ld. AR of the assessee has not pressed the Ground No.1. 2. Hence, the same is dismissed being not pressed. 3.1 The facts apropos to Ground No. 1.1 are that the assessee has declared the capital gains from transfer of industrial property to the tune of Rs. 26,25,762/. On examination of the sale deed, it was observed by the AO that the DLC value of the property has been taken at Rs. 58,98,653/-. Accordingly, he has calculated the capital gain as per DLC value of the property. The case of the assessee is that the value adopted by the same Valuation authority exceeded the fair market value of the property as on the date of transfer and therefore, requested to refer the matter to the Valuation Officer. It is noticed that the assessee has taken a plot of land from Rajasthan State Industrial & Mineral Development Corporation in the year 1979 on lease for 99 years commencing from 21-01-1979 and has paid Economic Rent and Service C....
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....against assessee as under: "8.1 The AO observed in his order that the assessee had declared capital gains from transfer of industrial property of Rs. 26,25,762/-. On examination of the sale deed, it was found that the DLC value of the property had been determined at Rs. 58,98,653/- and capital gains were commensurately calculated. 8.2 The AR of the assessee submitted that the value adopted by the stamp valuation authority exceeded the fair market value of the property as on the date of transfer and requested to refer the matter to the valuation officer. 8.3 I have carefully perused the order of the AO and the submission of the AR and reject the submission as he has not given any evidence or cogent arguments to support his claim that the value taken by the stamp valuation authority exceeded the fair market value of the property Therefore, his request is rejected and the decision of the AO to take the value of the property at Rs. 58,98,653/- u/s 50C is upheld." 4. Your honour, the assessee had taken a plot of land from Rajasthan State Industrial & Mineral Development Corporation in the year 1979 on lease for 99 years commencing from 21.01.1979. Kin....
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....in cases in which capital gain on compulsory acquisition of land and building is charged. Sub-section (i) of section 54D opens with:. "Subject to the provisions of sub-section (2), where the capital gain arises from the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or any right in land or building, forming part of an industrial undertaking... ". It can be seen from section 54D that 'land or building' is distinct from 'any right in land or building'. Similar position prevails under the Wealth-tax Act, 1957 also. Section 5(1) at the material time provided for exemption in respect of certain assets. Clause (xxxii) of section 5(1) provided that "the value, as determined in the prescribed manner, of the interest of the assessee in the assets (not being any land or building or any rights in land or building or any asset referred to in any other clauses of this subsection) forming part of an industrial undertaking" shall be exempt from tax. Here we can see that a distinction has been drawn between 'land or building' on one hand and 'or any rights in land or building' on the other. As section 50C applies o....
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.... ownership rights. The monies received by the assessee under the said agreement, were thus clearly in the nature of receipts transfer of tenancy rights and thus Section 50C could not have been invoked on the facts of this case. Therefore, it is sine qua non for application of Section 50C that the transfer must be of a 'capital asset, being land or building or both', but then a leasehold right in such a capital asset cannot be equated with the capital asset per se. Therefore, when a leasehold right in ''land or building or both'' is transferred, the provision of Section 50C cannot be invoked. 10. Your honour kindly see page no. 4 of paper book, paragraph 1 which reveals that assessee transfer only interest in lease hold land. 11. Your honour, the AR relied on the following decisions. 11.1 in DCIT vs. Tajinder Singh (ITAT Kolkata) March 1st, 2012 it has been held that Section 50C does not apply to transfer of tenancy / lease hold rights. The sine qua non for application of Section 50C is that the transfer must be of a 'capital asset, being land or building or both;''. A 'leasehold right in land or building' cannot be equated with the 'land or building'. Acc....