TaxTMI 
TaxTMI 
2017 (10) TMI 1600
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....t. Ruchika Gupta for a consideration of Rs. 27,50,000/- each i.e.e Rs. 55,00,000/- in aggregate. The Ld. Lower Authorities have adopted the value as of the Stamp Valuation Authority at Rs. 96 lakhs treating the leasehold rights as "Land or building or both". Since, the assessee ws having only lease4hold right and transferred the same, the provisions of Section 50C is not applicable in view of Atul G Puranik v. ITO 12(1) (1) reported in [2011] 11 Taxmann.co.92(Mumbai Trib) in which it was held that transfer of leasehold rights in a plot of land cannot be includd within the scoe of "land or building or both". As such the sales consideration shall be taken at Rs. 55,00,000/- instead of Rs. 96,00,000/- i.e. value adopted by Stamp Valuation Authority i.e. actual sale consideration. 3. For that other grounds, if any, would be urged at the time of hearing." 3. Brief facts of the case are that the Delhi State Industrial Development Corporation had executed a perpetual lease deed in respect of the leasehold rights in the plot of land no. D-1551, Narela Industrial Complex, New Delhi. Admittedly the said land is owned by the Government i.e. Narela Industrial Complex, New Delhi and initiall....
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.... transferred the same. Therefore, as per the submisssions of Ld. AR the provisions of Section 50C is not applicable in view of the order passed by Co-ordinate bench of ITAT in the case of Atul G Puranik v. ITO 12(1) (1) reported in [2011] 11 Taxmann.co.92(Mumbai Trib). 9. We have examined the issue of invocation of the provisions of Section 50C of the Act in respect of the leasehold rights in the land. We find that this issue has already been examined by various Benches of the Tribunal wherein, it has been consistently held that the provisions of Section 50C of the Act cannot be invoked in transaction involving transfer of leasehold rights of land or building. 10. Ld. AR relied on the orders of the Co-ordinate Benches of the ITAT in the case of Shri Farid Gulmohamed vs. ITO in ITA No. 5136/Mum/2014 wherein, the identical issue was involved. The operative portion of the order of Co-ordinate bench are reproduced below: "5.3.4 We find from the record that there is no dispute that the foreshore land at Napean Sea Road, Mumbai is a leasehold land for which the leasehold rights were acquired on 27.11.1953 for a period of 99 years from the Governor of Bombay and the ownership of which....
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....ions made on account of long term capital gain. Thus, ground no.1, raised by the Revenue is dismissed. 5.3.6 In the case of Kumarpal Mohanlal Jain (ITA No. 7231/Mum/2010 dated 30.11.2015) the Co-ordinate Bench of this Tribunal at para 6 has held as under: - "6. We have considered the rival submissions. Admittedly, the MIDC has originally given the lease of the land in the year 1964. The Assessee had purchased the leasehold rights in the property in 1991 for a sum of Rs. 9 lakhs and after carrying out his business for 15 years had sold the same for Rs. 25 lakhs vide deed of assessment dated 29.04.05. Hence, the assessee had sold the leasehold rights for the remaining period of 55 years. A perusal of the provisions of section 50C of the Act reveals that the same are applicable for the transfer of land or building or both. however, the leasehold rights or the tenancy rights are different from the ownership of land or building itself. Reliance in this respect can be placed on the following decisions: 1. Kancast (P.)Ltd. vs. ITO - 2015 68 SOT 110 (Pune - Trib.) 2. M/s. Fordham Pressings (India) Pvt. Ltd. vs. DCIT /ITA No.6033/Mum/2010] decided on 25.04.2012 3. M/s. Heatex Prod....
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....aw 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 sec. 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 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 we are dealing with special provision for full value of consideration in certain cases u/s.50C, which is a deeming provision, the fiction created in this section cannot be extended to any asset other than those specifically provided therein. As sec. 50C applie....
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....he Act for the purposes of ascertaining the full value of consideration. Infact, the heading of section itself provides that it is "Special provision for full value of consideration in certain cases". Therefore, .there is a significance to the expression "a capital asset, being land or building or both" contained in section 50C of the Act. The significance is that only capital asset being land or building or both are covered within the scope of section 50Cof the Act, and not all kinds of capital assets. 10. In-fact, the Mumbai Bench of the Tribunal in the case of Atul G. Puranik: (supra) which was pressed into service by the assessee before the lower income-tax authorities, clearly brings out the aforesaid proposition. In our view, the said decision of the Tribunal has been wrongly disregarded by the CIT(A). The plea of the CIT(A) is based on the meaning of expression 'immovable property' contained in Explanation below section 269UA(d)(i) of the Act. According to the CIT(A), the Explanation below section 269UA(d)(i) of the Act makes it clear that the land, building, etc. included in the phrase 'immovable property' also includes any rights therein. The CIT(A) has c....
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....orgren (I)Ltd. vs. DCIT vide ITA no.8101 of2011 dated 14.12.2012 to hold that section 50Cof the Act does not apply to transfer of leasehold rights in land. The decision of the Ahmedabad Bench of the Tribunal in the case of Shri Yasin Moosa Godil (supra) is also on similar lines. 13. In view of the aforesaid legal position and in the absence of any decision to the contrary brought out by the Revenue, we conclude by holding that section 50C of the Act does not come into operation in the present facts where what is transferred by the assessee is only the leasehold rights in land which were acquired by it from Maharashtra Industrial Development Corporation {i.e. MIDC) on a 99 years lease basis. As a consequence, we set aside the order of the CIT(A)and direct the Assessing Officer to compute the long term capital gain on transfer of leasehold land by adopting the full value of consideration of Rs. 2,35,04,OOO/- declared by the assessee in the computation of income and allow the appropriate relief to the assessee. Thus, on this Ground assessee succeeds." 11. Since it has been repeatedly held by different Benches of the Tribunal that provisions of section 50C of the Act cannot be in....