2018 (11) TMI 1904

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....Ward-1(3)(4), Surat(in short "the AO") dated 14.03.2016 under section 143(3) of Income Tax Act,1961 (in short 'the Act'). 2. Ground raised by the assessee as under : "1. ADDITION OF Rs.3,68,289/-U/S 50-C OF THE ACT (i) The Learned CIT (A) has erred in law and on facts in confirming the addition made by the assessing officer of Rs.3,68,289/ -u/s 50-C of the Act on transfer of right in leasehold property by not appreciating the law that the section 50-C applies only for transfer of land, building or both not for transfer of leasehold rights . (ii) The Learned CIT (A) has erred in not appreciating the judgment of the Jurisdictional Tribunal in the case of ITO v. Shri Yassin Moosa Godil (ITA No 2519/Ahd/2009 dtd. 13-04- 2012) as quoted ....

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....ction 50C of the Act on transfer of right in lease hold property are not applicable as that section 50C applies only for transfer of land, building or both not for transfer of lease hold rights. The ld.Counsel relied in the case of CIT vs. Mother India Refrigeration Industries Pvt. Ltd. [1985] 155 ITR 711 (SC) and submitted that the provision of section 50C are applicable on transfer of land or building or both but it is not applicable in case of transfer of any tenancy or lease hold rights in the property. Section 50C is a deeming provision by a virtue of which a legal fiction has been created. It is a settled law that legal fiction cannot be extended beyond the purpose for which it is enacted. Legal fiction is only for a definite purpose ....

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.... the balance sheet. The assessee has contended that since he has transferred his lease holding right in the shop, therefore, provisions of section 50C are not applicable. The perusal of section 50C manifest that it applies only to the land or building or both. Section 50C can come into play only in a situation where the consideration received or accrue as a result of transfer by a appellant of a capital asset being land or building or both is less than the value adopted or assessed or assessable for the purpose of payment of stamp duty in respect of such transfer. It is settled legal position that deeming provision can be applied only in respect of the situation specifically given and hence cannot go beyond the explicit mandate of this sect....