TaxTMI 
TaxTMI 
2019 (2) TMI 1197
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....ing and not the entire undertaking with other assets as the registered sale deed did not mention so. That on the facts and circumstances of the case, such observations are wrong and defeats the entire concept of slump sale. 2.2 That the learned CIT(A) erred in holding that the provisions of section 50C of the IT Act are applicable in this case. On the facts and in the circumstances and even as per law, provisions of section 50C are not at all applicable in this case. 2.3 The observations of the learned CIT(A) that the appellant should have raised objection before the stamp duty authority are not correct as there is no such provision in the statute. 2.4 That the learned CIT(A) erred in directing the AO to revoke capital gain by taking sale price of land and building at Rs. 4.18 crores and reducing from it the depreciated value of land and building. That on the facts and in the circumstances of the case, such directions tantamounts to enhancement of income in gross violation of the conditions envisaged u/s 251(2) of the Act. 2.5 The Ld CIT(A) erred in justifying the AO's action in replacing the value derived by the Stamp Valuation Authority at ....
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....t adopting the value as per the stamp valuation authority. Ld. Counsel for the assessee vehemently argued that the authorities below have failed th appreciate the facts in right perspective and submitted that section 50C of the Act would not be applicable on the facts of the present case as in the present case, the assessee has made slump sale. It has to be covered u/s 50B of the Act. As per section 50B of the Act, the valuation assessed by stamp valuation authorities cannot be adopted. 3. Ld. Counsel for the assessee has taken us through the provisions of section 50B of the Act and sale deed executed by the vendor assessee. He also drew our attention to the newspaper clippings by the vendee of the property in support of contention that the sale so executed was a slump sale. He has also drawn our attention to the definition of slump sale as defined u/s 2(42C) of the Act. In support of this contention Ld. Counsel has relied on the decision of the special bench of this Tribunal, Mumbai in the case of DCIT Vs. Summit Securities Ltd. in ITA No.4977/Mum/2009. Further, Ld. Counsel for the assessee submitted that even if it is not treated as a slump sale, in that event also there would....
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....al submissions, perused the materials available on record and gone through the orders of the authorities below. The first contention of the assessee is that the transaction would fall within the ambit of section 50B of the Act. Therefore, provisions of section 50C of the Act cannot be applied. It is contended that the transaction is a slump sale and a strong stress is laid on the subsequent possession letter and the notification made by the vendee in news paper. For the sake of clarity, the relevant clauses of sale deed executed by the assessee are to be considered. As per the clause (2), the property is described as land and building and it is also stated that the electricity and water connection in running condition is part of the sale. This clause does not say anything about the furniture and fixtures and other gadgets. Admittedly, the assessee has been running a cinema hall. So it cannot be assumed that the cinema hall was without any machinery, furniture or other gadgets necessary for displaying the movies. Further, it is noted that as per clause (5) of the sale deed, it is stated that vacant possession of the building has been handed over by the assessee to the vendee. These ....
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....ions of s. 50C for the purposes of computing capital gain. His view was based on the assessee's submission that the market rate prevailing for land at Village Kamothe-II published by Panvel Nagar Palika during 1st April, 2004 to 31st Dec, 2004 was Rs. 3,950 per sq. mtr. The learned CIT(A) upheld the action of the AO on this score. The learned counsel for the assessee contended that the authorities below were unjustified in applying s. 50C. Per contra, the learned Departmental Representative supported the impugned order on this issue. 11.1 In order to appreciate the rival contentions on this issue, it would be apt to consider the prescription of s. 50C(1), which is as under : "50C. (1) Where the consideration received or accruing as a result of the transfer lby an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereinafter in this section referred to as the 'stamp valuation authority') for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of s. 48, be deemed t....
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....d 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 ITR 59 (SC) has considered the scope of a deeming provision and came to hold that it cannot be extended beyond the object for which it is enacted. Similar view has been reiterated by the Hon'ble Supreme Court in CAT v. Mother India Refrigeration Industries (P) Ltd. (1985) 48 CTR (SC) 176 : (1985) 155 ITR (SC) by laying down that "legal fictions are created only for some definite purpose and these must be limited to that purpose and should not be extended beyond their legitimate field". In CIT v. Ace Builders (P) Ltd.(2005) 195 CTR (Bom) 1 : (2006) 281 ITR 210 (Bom) the Hon'ble jurisdictional High Court considered the facts of a case in which the assessee was a partner in a firm which was dissolved in the year 1984 and the assessee was allotted a flat towards the credit in the capital asset with the firm. The assessee showed the flat as capital asset in its books of account and depreciation was claimed and allowed from year to year, In the previous year relevant to asst. yr. 1992-93, the assessee sold t....
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....D deals with certain cases in which capital gain on compulsory acquisition of land and building is charged. Sub-s.(1) of s. 54D opens with 'Subject to the provisions of sub-s. (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 is palpable from s. 54D that 'land or building' is distinct from 'any right in land or building'. Similar position prevails under the WT Act, 1957 also. Sec. 5(1) at: the material time provided for exemption in respect of certain assets. Clause (xxxii) of s. 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 sub-section) 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....