AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (7) TMI 948
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the said provisions of Sec. 50C of the Act are not applicable on the facts of the case of the assessee. The second grievance relates to not granting of exemption u/s. 54EC of the Act on investment of Rs. 50,00,000/- in the purchase of REC bonds. 3. During the course of the scrutiny assessment proceedings, the Assessing Officer observed that the assessee has shown Long Term Capital gains on sale of land at Thane of Rs. 22,72,750/- and has claimed exemption u/s. 54EC of the Act in respect of purchase of REC bonds at Rs. 50,00,000/-. The assessee was asked to furnish the details relating to this transaction. On receiving the details, the AO noticed that as per the agreement for sale of property of Thane, the market value is shown at Rs. 1,87....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the assessee took an altogether new plea that the transfer of land which has resulted into Long term capital gains was infact transfer of a leasehold right , therefore provisions of Sec. 50C are not at all applicable. For this proposition , the Ld. Counsel relied upon the decision of the Tribunal, Mumbai Bench in the case of Atul G. Puranik Vs ITO in ITA No. 3051/Mum/2010 for A.Y. 2006-07 reported in 58DTR 208. It is the say of the Ld. Counsel that the assessee has transferred lease rights therefore provisions of Sec. 50C are not applicable. 6. Per contra, the Ld. Departmental Representative strongly submitted that the plea taken by the assessee before the Tribunal was never taken before any of the lower authorities; therefore, if the pl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed as under: "The Assignor shall transfer the lease hold rights to the assignee by executing the Deed of Assignment and register the said Deed of Assignment with the Sub-Registrar of Assurance." 8. These facts clearly show that what has been transferred is a leasehold right. That being the fact of the matter, the decision of the Tribunal in the case of Atul G. Puranik (supra) squarely applies on the facts of the Case. The Tribunal at para 11.3 and 11.4 of its order has held as under: 11.3 It is a settled legal proposition that a deeming provision cannot be extended beyond the purpose for which it is enacted. The Hon'ble Apex Court in CIT v. Amarchand N. Shroff (1963) 48 IT 59 (SC) has considered the scope of a deeming provision and came....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as capital gain on the sale of short-term capital asset and hence no benefit u/s.54E could be allowed. When the matter came up before the Hon'ble Bombay High Court, it was noticed that sub-sections (1) and (2) of sec. 50 contained a deeming provision and such fiction was restricted only to the mode of computation of capital gain contained in sections 48 and 49 and hence it did not apply to other provisions. The assessee was held to be eligible for exemption u/s.54E in respect of capital gain arising out of the capital asset on which depreciation was allowed. 11.4 In view of the aforenoted judgments rendered by the Hon'ble Apex Court and that of the Hon'ble jurisdictional High Court, it is clear that a deeming provision can be applied onl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ec. 54D that `land or building' is distinct from `any right in land or building'. Similar position prevails under the W.T. Act, 1957 also. Section 5(1) at the material time provided for exemption in respect of certain assets. Clause (xxxii) of sec. 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 also it is worth noting that a distinction has been drawn between `land or building' on one hand and `or any rights in land or building' on the other. Considering the fact that w....