TaxTMI 
TaxTMI 
2021 (8) TMI 754
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....rights in the property? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to take 70% of the safe value of the property as the cost of acquisition without appreciating the fact that there is no provision in the Act to arrive at the cost of acquisition in this manner. 4. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of Assessing Officer be restored. 5. The appellant craves leave to amend, alter, delete or add grounds which may be." 2. Briefly stated, the assessee company had e-filed its return of income for A.Y. 2011-12 on 29.11.2011, declaring a total income of Rs. 2,02,57,520/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act. Original assessment was framed by the A.O u/s 143(3) of the Act, dated 28.03.2014 at an income of Rs. 8,35,36,800/- after inter alia assessing the Long Term Capital Gain (LTCG) on sale of property under Sec. 50C at Rs. 7,71,09,287/- (as against LTCG shown by the assessee in its return of income at Rs. 1,38,30,005/-). 3. Aggrieved, the assesse carried the matter in appeal before the CIT(A).....
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....ssary deliberations the CIT(A) accepted the assessee's claim that in a case of mere transfer of reversionary rights the market value could not be considered for the purpose of computing the income under the head capital gain. Accordingly, the CIT(A) after perusing the agreement, dated 08.07.2013 qua the aforesaid transfer transaction observed, that as the assessee had only transferred its reversionary rights in the property in question, therefore, the provisions of Sec.50C would not stand triggered. The CIT(A) while concluding as hereinabove relied on an order of the ITAT, Kolkata in the case of DCIT Vs. Tejinder Singh, ITA No. 1459/Kol/2011, dated 29.02.2012 and that of ITAT, Hyderabad in the case of ITO, Ward-10(2), Hyderabad Vs. Ms. D. Anitha, ITA No. 394/Hyd/2014, dated 24.12.2014. Accordingly, the CIT(A) directed the A.O to take the sale consideration in respect of the transaction entered by the assessee with M/s Yash & Yashika Mercantile Pvt. Ltd. as was reflected by the assessee in its return of income. As regards the assessee's claim that 70% of the sale consideration be considered as the cost of acquisition of the properties that were sold during the year under considerati....
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...., Sethna's solicitor, viz. M/s Vachha & Co. sought the consent of the assessee company for assignment of the leasehold rights by their clients, viz. Sethna in favour of one Siraj alias Shiraj Mohamadali Calcuttawala. Backed by the aforesaid facts, the assessee company terminated the lease on the ground of breach of the terms and conditions of the lease and agreed to sell its reversionary rights in the aforesaid property for a lump sum consideration of Rs. 6,00,016/- to Yash & Yashika Mercantile Pvt. Ltd. On the basis of the aforesaid facts, it has been the claim of the assessee company that what was transferred by it vide agreement dated 08.07.2013 to Yash & Yashika Mercantile Pvt. Ltd were the reversionary rights qua the property in question viz. New Bolton House. After deliberating on the claim of the assessee that the deeming provisions of Sec. 50C would not stand triggered in a case where an assessee had only transferred its reversionary rights in a property, we find, that the CIT(A) had found favour with the same and had observed as under: "3.1.13 As the appellant has only transferred the tenancy rights, sec. 50C is not applicable in this case. I find that ITAT, Kolkata in t....
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....the provisions of Section 50 C can only be applied in respect of "transfer by an assessee of a capital asset, being land or building or both", the provisions of Section 50 C will apply on receipt of consideration on transfer of a property, being land or building or both, these provisions will not come into play in a case where only tenancy rights are transferred or surrendered. It is, therefore, important to examine as to in what capacity the assessee received the payment. No doubt the assessee was a party to the registered tripartite deed dated 20th July 2007 whereby the property was sold by the KSCT, but, as a perusal of the sale deed unambiguously shows, the assessee has given up all the rights and interests in the said property, which he had acquired by the virtue of lease agreements with owner and which were, therefore, in the nature of lessee's rights; these rights could not have been, by any stretch of logic, could be treated as ownership rights. It has been specifically stated in the sale deed that the lessee, which included this assessee before us, had proceeded to, inter alia, "grant, convey, transfer and assign their leasehold rights, title and interest in the said premi....
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....d that the assessee was not the owner of the property and since she had only limited rights over the property, which was also encumbered, the market value of the property as taken for the purpose of payment of stamp duty could not be adopted as the sale consideration by applying the provisions of S.50C. We have already concurred with the learned CIT(A) while deciding the issue involved in the appeal of the assesses that the assesses was not the absolute owner of the property and what the assessee held was only certain limited rights over the said property, it, therefore, follows that the capital asset held by the assessee itself was neither the land nor the building as envisaged in sub-section (1) of S.5OC, and while computing the capital gains arising from transfer of such asset, the value adopted by any authority of State Government for the purpose of payment of stamp duty cannot be taken as full value of consideration by applying the provisions of S.50C, as rightly held by the learned CIT(A). We therefore, uphold the impugned order of the learned CIT(A) on this as well, and dismiss the appeal filed by the Revenue." 3.1.15 The above decisions of Hon'ble ITATs are squarely a....
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....liberating on the aforesaid claim of the assessee observed, that a similar issue had earlier came up before his predecessor in the assessee's own case for A.Y 2012-13, wherein he had vide his order dated 18.12.2017 decided the issue in favour of the assessee. It was further observed by him that his predecessor while deciding the aforementioned appeals in favour of the assessee had followed the view that was taken by the ITAT in the assessee's own case, viz. ITA No. 3585/Mum/2014 for A.Y 2007-08 in ITA No. and for A.Y 2007-08, 2008-09 and A.Y 2010-11 in ITA No. 4129/Mum/2014, ITA No.7762/Mum/2011 and ITA No.4043/Mum/2014, dated 14.09.2010. Accordingly, the CIT(A) relying upon the aforesaid order passed by his predecessor and that of the Tribunal in the assessee's own case for the preceding years directed the A.O to take 70% of the sale value of the property as the indexed cost of acquisition while computing its income under the head LTCG. The CIT(A) while concluding as hereinabove had observed as under: "3.2.2 These grounds pertain to the claim of the appellant regarding the appellant's claim of taking cost of acquisition at 70% of the sale value. The assessing Officer has discuss....