2014 (8) TMI 1034

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.... common order for the sake of convenience. 2. First we take up the appeal for assessment year 2007-08 i.e. I.T.A. No.256/Lkw/2011. 3. Ground No. 1 is as under: "1. The Learned Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in considering the net sale consideration Rs. 2,25,000/- as against Rs. 66,38,900/- taken by the Assessing Officer, without appreciating the facts brought on records during the course of assessment proceedings." 4. Learned D.R. of the Revenue supported the assessment order and placed reliance on the judgment of Hon'ble Kerala High Court rendered in the case of Lissie Medical Institutions Vs Commissioner of Income-tax [2012] 321 ITR 371 (Ker). 5. Learned A.R. of the assessee s....

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....a trite law that Special provisions override the general provisions. Once capital gains has been computed, if the assessee happens to be a trust to whom provisions of section 11 to 13 are applicable, then one has to refer to the provision of section 11(1 A) of the I.T. Act which deals with the treatment to be given to such capital gains when earned by a trust. It would be worthwhile to reproduce the relevant portion of the subsection as under:- (a) where a capital asset, being property held under trust wholly for charitable or religious purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the capital gain arising from the transfer shall be deemed ....

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.... consideration has been given in section 50C for the purpose of section 48. One is entitled to ascertain the purpose for creating a statutory fiction. After ascertaining the purpose, full effect must be given to the statutory / fiction and it should be carried to its logical conclusion and to that end, it would be proper and even necessary to assume all those facts on which alone fiction can operate. The legislature in its wisdom has referred to section 48 in section 50C for, adopting the same value as fair market value. Hence, the deeming fiction as provided in section 50C in respect of the words 'full value of the consideration' is to be applied only for section 48. The words full value of consideration as mentioned in other provi....

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....eration of Rs. 2.25 lac and the entire sale consideration was invested in other capital asset i.e. fixed asset with bank. The Assessing Officer invoked the provisions of section 50C of the Act and computed the capital income at Rs. 66.38 lac based on the value adopted by stamp duty authorities for stamp duty purposes. We find that the CIT(A) has decided this issue in favour of the assessee by following the Tribunal decision in the case of Gyanchand Batra vs. Income Tax Officer 115 DTR 45 (JP-Trib). 6.2 We also find that it is specifically mentioned in section 50C(1) of the Act that the stamp duty value is to be considered as full value of consideration received or accruing as a result of transfer for the purpose of section 48 of the Act.....

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....t appreciating the facts brought on records during the course of assessment proceedings. 2. The Learned Commissioner of Income Tax (Appeals)-II, Kanpur has erred in law and on facts in deleting the addition of Rs. 50,16,646/- on account of exemption u/s 11(1A) of the Income Tax Act, 1961 holding that section 50C of Income Tax Act is not applicable in the case of charitable institution. 3. That the order of the Ld. CIT (A)-I, Kanpur dated 10.02.2011 needs to be quashed and the order passed by the Assessing Officer dated 27.12.2010 be restored. 4. That the appellant craves leave to modify any of the grounds of appeal mentioned above and/or to add any fresh grounds as and when it is required to do so." 9. Both the sides agreed that....