TaxTMI 
TaxTMI 
2025 (10) TMI 1010
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....The Ld. CIT(A) grossly erred on facts as well as in law in confirming the assessment order in spite of the fact that approval u/s 151 of the IT Act, 1961 was not attached with reasons forwarded to the appellant. 4. The Ld. CIT(A) grossly erred on facts as well as in law in not allowing relief u/s 50G without appreciating the fact in proper perspective. 5. The Ld. CIT(A) grossly erred on facts as well as in law in not allowing relief u/s 50G in spite of the fact that industrial unit has been shifted from Urban Area to Non Urban Area and not from one Urban Area to another Urban Area as notified by the Central Government vide notification no. SO 619(E) dt. 27/04/2006 and in holding that this issue has not been addressed before him (para 20) though the submission on this issue were filed vide para 12 of written submission dt. 11/12/2017. 6. The Ld. CIT(A) grossly erred on facts as well as in law in confirming the addition of Rs. 60,00,000/- made u/s 50C/50G of the IT Act, 1961 in spite of the fact that investment in new asset being Rs. 69,43,070/- is much more than the capital gain on transfer of old asset. 7. The Ld. CIT(A) grossly erred on facts as....
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....ghts. Ld. Counsel submitted that Section 50C is not applicable on transfer of lease hold rights as settled judicially for the following reasons: "a) Section 50C refers to "land or building or both" only without referring to "right in land or building or both". In fact, the distinction between a capital asset being 'land or building or both' and any 'right in land or building or both' is well recognized under the I.T. Act itself. Sec. 54D deals with certain cases in which capital gain on compulsory acquisition of land and building is charged. Sub-sec.(1) of sec. 54D opens with: "Subject to the provisions of sub-section (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''. The Legislature in its wisdom has used both the terms in sections 54D which proves beyond doubt that these two terms are different. Similarly, section 5(1)(xxxii) of Wealth Tax Act also refers to "not being any land or building or any rights in land or building ", It is palpable from both these sections that 'land or building' is....
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.... 50C of the Act applicable in case of capital gain arising from sale/transfer of the specified capital asset "land and building" only. Faced with this situation, learned departmental representative quotes Vidarbha Veneere Industries Ltd. vs. ITO (2025) 174 taxmann.com 223 (Bom.) that the impugned statutory provision also could be invoked in sale/transfer of lease rights as well. The assessee on the other hand places strong reliance on V.S. Chandrashekar vs. ACIT (2021) 129 taxmann.com 273 (Kar.) deciding the very issue in his favour. No guidance has admittedly come from Hon'ble jurisdictional high court at Delhi. We therefore quote CIT Vs. Vegetable Products Ltd. (1973) 88ITR 192 (SC) that in such an instance of conflicting Hon'ble non-jurisdictional High Courts' decisions, a view which favour s the assessee ought to be adopted and delete the impugned section 56(2)(vii) addition herein amounting to Rs. 21,95,375/- in very terms. Ordered accordingly. 5. All other pleadings between the parties on merits stand rendered academic. 6. This assessee's appeal is allowed in above terms. Order Pronounced in the Open Court on 29/09/2025." c) Relevant....
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....istinction also has found approval of the Hon'ble Bombay High Court in the case of C.I.T. vs Greenfield Hotels & Estates Pvt. Ltd. (supra) and other Tribunal decisions which have been referred to in the earlier part of this order. Apart from that, we find that a recent decision of our Coordinate Bench in the case of Manish Traders vs ITO in ITA No. 4481/D/2016 dated 22.7.2019 (reported in 2019 (7) TMI 1268 - ITAT Delhi has observed that assessee's leasehold right for a period of 90 years in question is a capital asset to which provisions contained u/s 50C are not applicable. 13. In view of the aforesaid factual position and in law, we find that the present transaction of six properties in question does not warrant invoking of section 50C(1) of the Act as the property in question is not of the nature covered by section 50C(1) of the Act. Therefore, on this point itself, we set aside the order of the Id. Commissioner of Income Tax(A) and direct the Assessing Officer to delete the addition." > Ritz Suppliers Pvt. Ltd. vs. ITO, 2020-TIOL-307-ITAT-KOL "19... As section 50C of the Act applies only to a capital asset, being land or building or both, it canno....
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....rela. Two Interpretations 14. It is also judicially settled that even if there are two interpretations on a subject, still in view of the Hon'ble Supreme Court decision in the case of CIT vs. Vegetable products 88 ITR192 = 2002-TIOL-574-SC-IT-LB, the assessee is entitled to application of judgment benefiting to it. This view has also been followed by the Hon'ble ITAT in its judgment in the case of Optitech Software (P) Ltd. vs. ITO, 2015-TIOL-394-ITAT-DEL." 7. On the other hand, the Ld. DR strongly placed reliance on the decision of the Hon'ble Bombay High Court, Nagpur Bench in the case of Vidharbha Vineer Industries Ltd. vs. ITO in tax appeal no.24/2022 dated 01.04.2022 and submitted that the Bombay High Court considered an identical issue as to whether the lease rights would fall under the purview of section 50C of the Act or not and held that the provisions of section 50C do apply for the lease rights. Ld. DR strongly supported the orders of the authorities below. 8. Heard rival contentions, perused the orders of the authorities below. The primary issue in this appeal to be adjudicated is as to whether the provisions of section 50C are applicable....
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....ch are peri-materia to the provisions of section 50C held that these provisions have no application to the lease rights involved in a capital asset of "Land and Building". 10. Thus, respectfully following the Hon'ble Karnataka High Court in the case of V.C. Chandra Shekhar vs. ACIT (supra) and the coordinate bench of the Tribunal in the case of Rajiv Kumar Sharma vs. CIT (supra), we hold that provisions of section 50C has no application to the facts of the assessee's case since what was sold by the assessee was not "land or building" or both but only the lease rights in the land. Resultantly Ground no.6 and 7 are allowed. 11. Coming to ground no.4 & 5 which is in respect of denying relief u/s 54G of the Act, Ld. Counsel for the assessee referring to page 5 of the assessment order submitted that the Assessing Officer stated that as per the provisions of section 54G(1) of the IT Act, 1961, the assessee was required to purchase the new asset within one year from the sale of original asset and this observation of the Ld. AO is completely incorrect. Ld. Counsel submitted that as per the provisions of section 54G(1) of the IT Act, 1961, the assessee was required to purchase the new....
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....an; 2019-TIOL-293-SC-IT "Having heard the parties, the Supreme Court condoned the delay and dismisses the SLP, thus concurring with the opinion of High Court on the issue of 'the date of issuance of allotment letter to be equated with date of acquisition of property'. Revenue's SLP dismissed" iii) Shri Karna Singh Vs ACIT; 2021-TIOL-1281-ITAT-DEL "6.4. Since the assessee in the instant case was allotted the property vide agreement Dated 11.04.2011 and allotment letter dated 08.07.2011, therefore, he has acquired a right in the asset and such right is a capital asset and payment of installments as per the terms is only a follow-up action and taking delivery of possession is only a formality. Therefore, the assessee in our opinion has correctly computed the long term capital loss. We, therefore, set aside the Order of the Ld. CIT(A) and direct the A.O. to allow the long term capital loss claimed by the assessee." 13.1 Ld. Counsel further submitted that the Assessee sold the industrial unit at Narela, Delhi for a consideration of Rs. 60,00,000/- on 28/08/2008 and the Assessee purchased an industrial plot in Sector A-3, Tronica City, Loni, Ghaziaba....
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.... orders of the Assessing Officer. 17. Heard rival submissions, perused the orders of the authorities below. In order to claim relief u/s 54G(1) of the Act the assessee was required to purchase the new asset within a period of one year before or three years after the date in which the transfer took place. The claim for relief u/s 54G was denied to the assessee by the AO observing that the assessee was required to purchase the new asset within one year from the sale of original asset. 18.1 Admittedly, the assessee sold the asset namely, Industrial Unit at Narela on 28.08.2008. It is evident from pages 40 & 41 of the Paper book furnished by the Assessee that UPSIDC give permission to transfer the plot in the name of the assessee on 16.09.2008 namely Industrial Plot No.D-30 & D-31 Industrial Sector, A-3 at Tronica City, Loni, Ghaziabad. The assessee also paid certain amounts pursuant to the transfer of allotment of industrial plot on the assessee's name on 16.09.2008 and also made further payments against demand notice dated 17.12.2008 which is evident from pages 47 & 48. 18.2 The Hon'ble Delhi High Court in the case of CIT vs. K.Rama Krishnan (supra) held that for the purpose....