The Pune Bench Income Tax Appellate Tribunal (ITAT) has ruled that the transfer of leasehold rights, the special provision for the full value of consideration under section 50C applicable if a transfer of building is involved.
The assessee, M/s. Envair Electrodyne Ltd. transferred leasehold rights in land which were acquired by it from Maharashtra Industrial Development Corporation (MIDC) on a 99 years lease basis. During the assessment proceedings Assessing Officer make section 50C addition of Rs.3,07,94,790/- concerning the transfer.
On appeal, the CIT (A) held that sec.50 C of the Act does not come into operation for the transfer of leasehold rights in land and reversed assessment order and deleted the addition. Aggrieved revenue filed an appeal before ITAT.
The Tribunal observed that section 50C does not get attracted even in the case of transfer of leasehold rights which does not come within the nature and ambit of a specified asset(s) of “land or building or both” in the statutory provision. The Tribunal further observed that the assessee appears to have transferred not only leasehold rights but also building.
The Coram of Mr. S.S. Godara, Judicial Member, and Dr. Dipak P. Ripote, Accountant Member has held that “we are of the view that section 50C is very much applicable regarding the assessee’s “building” as it indeed covers within the specified category of asset u/s 50C(1) of the Act. We, therefore, partly reverse the CIT(A)‟s lower appellate findings granting full relief to the assessee and restore this latter issue of transfer of assessee‟s building back to the Assessing Officer for his fresh adjudication on merits as per law within three effective opportunities of hearing”.
Mr. S.P. Walimbe appeared on behalf of the revenue.
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