M/S. DATAMATRIX TECHNOLOGIES PVT. LTD,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX 9(3)(1), MUMBAI

The first issue in this appeal of assessee is against the order of CIT(A) in restricting the disallowance of expenses relatable to exempt income by invoking the provision of section 14A of the Act read with Rule 8D(2) of the Income Tax rule, 1962 (hereinafter referred to as ‘Rules’) to the extent of exempt income only. At the time of hearing the learned counsel for the assessee has not pressed this issue, hence, the same is dismissed as not pressed.

The second issue in this appeal of assessee is against the order of CIT(A) upholding the action of the Assessing Officer on account of depreciation by adopting the stamp value as per the provision of Section 50C of the Act instead of value declared as per WDV. For this assessee has raised the following ground No.2:-

2. On the facts and circumstances of the case and in law, the learned CIT(A), erred in upholding the disallowance of depreciation of Rs.2,07,226/- made by the A.O.; by adopting the stamp value of Rs.1,73,85,500/- of property sold instead of Rs.1,53,00,000/-, the value declared by the Appellant.

Briefly stated facts are that during the Financial Year the assessee sold his property for a consideration of Rs.1,53,00,00/- situated at 501, 5th Floor, K.L. Accolade, 6th Road, Santacruz (E), Mumbai-400 055 for a consideration of Rs. 1,53,00,000/-. The Assessing Officer deducted the “4.2.3 I have considered the submissions of the appellant and perused the materials available on record. It is seen that appellant has put his contention through words not through documentary evidences. The provision of sec 50C is analyzed hereunder: - The provisions of the Section 50C are applicable in the case of transfer of land and building including depreciable capital asset. The provision of section 5OC contains a special provision for determining full value of consideration and as per provisions of section 5OC when the consideration received or accruing as a result of the transfer by an appellant of capital asset being land or building or both, is less than the value adopted or assessed by an authority of the State Government for the payment of stamp duty in 4.2.4 Further, Section 50C is a measure provided to bridge the gap as it was found that the appellant were not correctly declaring the full value of consideration or in other words resorting to the practice of under valuation. Further, the decision of jurisdictional ITAT Special Bench in the case of ITO vs. United Marines Academy (2011)138 TTJ 129(Mum) has made it clear that section SOC will be applicable on the sale value of depreciable asset.