SMT SNEHA PUROHIT,NAGPUR vs. THE ASSTT COMMISSIONER OF INCOME TAX (CIRCLE -4), NAGPUR

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ITA 57/NAG/2018Status: DisposedITAT Nagpur25 September 2023AY 2010-2011Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI GD PADMAHSHALI (Accountant Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 50C of the Act is applicable only to land and building, and not to lease rights. Therefore, the addition of long-term capital gains based on stamp duty value was deleted.

What were the facts?

The assessees were assessed for long-term capital gains by invoking Section 50C of the Income Tax Act, 1961. The capital asset in question was lease rights, not land or building.

What were the issues?

Whether Section 50C of the Income Tax Act, 1961, can be invoked for the transfer of lease rights. Whether lease rights fall under the definition of 'land' or 'building' for the purpose of Section 50C.

Which sections of the Income-tax Act were involved?

Section 50C

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Income Tax Appellate Tribunal, NAGPUR BENCHES : NAGPUR

Before: SHRI SATBEER SINGH GODARA & SHRI GD PADMAHSHALI

Hearing: 29.08.2023Pronounced: 25.09.2023

THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCHES : NAGPUR (THROUGH VIRTUAL HEARING) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI GD PADMAHSHALI, ACCOUNTANT MEMBER ITA.No.56/Nag./2018 Assessment Year 2010-2011 Smt. Anjali Purohit The Assistant Commissioner of Income C/o. S. B. Hajare & Co. Chartered Accountant, 678, vs. Tax Hajari House, Karnewar Circle-4, Nagpur Marg Sitabuldi, Nagpur - 440012 PAN: ADLPP5248D (Appellant) (Respondent) & ITA.No.57/Nag./2018 Assessment Year 2010-2011 Smt. Sneha Purohit The Assistant Commissioner of Income C/o. S. B. Hajare & Co. Chartered Accountant, 678, vs. Tax Hajari House, Karnewar Circle-4, Nagpur Marg Sitabuldi, Nagpur - 440012 PAN: ADLPP5247N (Appellant) (Respondent) For Assessee : Shri Abhay Agrawal, Adv. For Revenue : Shri Rishi Kumar Bisen, DR Date of Hearing : 29.08.2023 Date of Pronouncement : 25.09.2023 ORDER PER BENCH :

These twin assessees’ instant as many appeals & 57/Nag./2018; for A.Y. 2010-11, arise against the CIT(A)-1, Nagpur’s separate orders; both dated 08.12.2017, passed in Case

2 ITA.No.356/Nag./2019 Jaikumar B. Bajaj vs. ITO Nos.CIT(A)-4/46/2015-16 & CIT(A)-4/45/2015-16; respectively in proceedings under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 [“In short Act”].

2.

Heard both the assessees as well as the department through their respective learned representatives. Case files perused.

3.

We notice at the outset during the course of hearing that both these assessees are aggrieved against the learned lower authorities’ action assessing long term capital gains of Rs.29,47,906/- each in their respective hands after invoking Section 50C of the Act. We sought to know about the nature of the capital asset transfer in the relevant previous year. The clinching fact which has gone unrebutted from the Revenue side during the course of hearing is that instead of the specified categories of assets i.e. “land” and “building” u/s. 50C, these twin assessees had possessed “lease rights” only in the 3rd Floor, Millennium Plaza, Near Indian Coffee House, Banasthal Road, Raipur (Chhattisgarh).

4.

Faced with this situation, the Revenue vehemently argued that these twin assessees had owned and possessed the lease rights akin to title of the abovestated asset and therefore, both the lower authorities have rightly invoked Section 50C of the Act in order to recompute the impugned long term capital gains going by the stamp value thereof.

3 ITA.No.356/Nag./2019 Jaikumar B. Bajaj vs. ITO 5. We find no merit in the Revenue’s foregoing arguments once it has come on record that such lease hold rights do not come within the purview of the specified categories of the assets i.e. “land” and “building” u/s. 50C of the Act in light of (2016) 389 ITR 68 (Bom.) CIT vs. Greenfield Hotels & Estates (P) Ltd. We thus accept the assessees’ corresponding arguments to delete the impugned identical long term capital gains addition in their respective hands. Ordered accordingly.

No other ground or argument has been pressed before us.

6.

These twin assessees’ appeals & 57/Nag./2018 are allowed in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 25.09.2023

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