The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has recently, in an appeal filed before it, held that the provisions of section 50c will not be applicable to capital gains which are prior to 1st of April 2003.
The aforesaid observation was made by the Tribunal, when an appeal was preferred before it by the assesse, M/s. Shri Ganadhiraj Co–operative Housing Society, challenging the impugned order dated 01/06/2016, passed under section 250 of the Income Tax Act, 1961, by the learned Commissioner of Income Tax (Appeals)– 40, Mumbai, [CIT(A)], for the assessment year 2010–11.
The grounds of the Assessee’s appeal being that on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in confirming the action of the A.O , of subjecting the capital gains to tax in AY 2010-11 ,while the plot had been sold in the previous year relevant to AY 2001-02 when the provisions of Sec. 50C were not applicable, it was submitted by the AR for the assesse that in the previous year under consideration, the legal heirs had agreed to register the document and that there was no purchase of property by the assessee society during the year under consideration but only registration .
However, with the DR On the other handvehemently relying upon the orders passed by the lower authorities and submitting that the builder did not comply with the basic conditions, viz. payment of Rs. 10,00,000, as advance, as mentioned in the offer letter dated 04/10/2000, addressed by the assessee to the builder and hence that even the offer letter was not honoured by the parties, the Tribunal observed as follows:
“It is interesting to note that on one hand the Revenue did not dispute the fact that the impugned property was purchased by the society in the year 1969 and accordingly computed the long term capital gain, despite the fact that conveyance deed in respect of that transaction was also delayed and was ultimately executed in the year under consideration, while, on the other hand, in respect of the transaction of transfer of development right to the builder, the Revenue is considering the date of registration of the agreement, i.e. 18/02/2010, as the date of transfer for the purpose of computation of capital gains tax.”
Thus, allowing the assessee’s appeal it ruled:
“In view of the aforesaid factual and legal position, we are of the considered view that development rights in the plot of land were transferred to the builder in the financial year 2000–01. Further, since provisions of section 50C of the Actwere inserted in the Act w.e.f. 01/04/2003, the same are not applicable in the present case.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanPremium. Follow us on Telegram for quick updates.
