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TMI Blog2015 (10) TMI 2245X X X X Extracts X X X X X X X X Extracts X X X X ..... certain cases under section 50C, which is a deeming provision, the fiction created in this section cannot be extended to any asset other than those specifically provided therein. As section 50C applies only to a capital asset, being land or building or both, it cannot be made applicable to lease rights in a land. As the assessee transferred lease right for sixty years in the Plot and not land itself, the provisions of section 50C cannot be invoked. Addition made in respect of mortgage expenses incurred for obtaining credit facilities for business purposes - Held that:- It is observed that the appellant has taken loans. The appellant fairly submits that some of the loans have been taken to invest in properties relating to business. The Ld.AR submits that the loan from the Urban Co- Operative Bank, Sonipat has been taken for availing funds from the bank for business. However the ld.AO has not established any nexus between the loans taken with the business activity carried on by the appellant.We are therefore inclined to send this issue back to the file of ld.AO for establishing nexus if any and then to consider the claim of the appellant. - Decided in favour of assessee for statis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before us. 6. Ground No.1: This ground of appeal has been raised challenging the selection the appellants case for scrutiny as per CBDT s Action plan under clause (8) under guidelines issued for financial year 2008-09. We are not inclined to interfere with these guidelines issued by the CBDT as the other grounds raised by the appellant has been dealt by us on merits. 7. Ground no. 2: The addition in respect of capital gains amounting to ₹ 3,37,450/-. The ld. AR submitted that the appellant had claimed capital gain loss on sale of shop plot no.120, New Anaj Mandi Sonepat which the appellant had purchased from M/s. Bhagat Ram Jug lal on 22.02.2001 for ₹ 6,54,500/- which was paid in the following manner; 22.02.2001 ₹ 80,000/- 22.09.2001 ₹ 83,625/- 26.09.2001 ₹ 4,80,875/- 8. The indexed cost of the plot was calculated by the appellant at ₹ 7,16,750/-. The said shop plot was sold to M/s.Shubham Enterprises for a sum of ₹ 7 Lakhs on 15.03.2007, thereby claiming a capital loss of ₹ 16,750/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case. Therefore, the ld. CIT(A) upheld the view of the AO and treated the transfer of capital asset in terms of the provisions of section 2(47). 13. The ld. AR further submits that as there has been no conveyance deed that has been entered into between the appellant and M/s Bhagat Ram Jhugla provisions of section 50C of the Act cannot be invoked. The ld. AR places reliance on the decision by Mumbai Tribunal in the case of Atulji Puranik vs. ITO 12(1)(i) reported in (2011) 11 taxmann.com 92. 14. The ld. DR supports the findings of the authorities below. 15. The major contention put forth on behalf of the appellant is regarding non-applicability of section 50C to the facts of the case. 16. Before we proceed to deal with the rival contention it is necessary to set the records straight inasmuch as there are certain factual inconsistencies recorded in the assessment order. The first being that the appellant was not allotted the plot on ownership basis for perpetuity but only of least basis for a small period of time. None of the authorities below have chosen to controvert the above fact. Now we decide the controversy before us in the light of correct and complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant argued that the market value of the plot of land on the date of allotment should be taken as the cost of acquisition. From the factual matrix of the case, it is noted that the appellant was allotted rights in the shop Plot on 22.02.2001. 20. The Assessing Officer adopted the value of shop plot sold on 15- 03-2007 at ₹ 6180 per sq.yard., by applying the provisions of section 50C for the purposes of computing capital gain. His view was based on the assessee's submission that the market rate prevailing for land during 1-4-2006 to 31-12-2007 was Rs. v per sq. meter. The Commissioner (Appeals) upheld the action of the Assessing Officer on this score. 21. On going through the provision of section 50C(1), it transpires that where the full value of consideration shown to have been received or accruing on the transfer of an asset, being land or building or both, is less than the value adopted or assessed or assessable by stamp valuation authority, the value so adopted etc. shall, for the purposes of section 48, be deemed to be full value of consideration received or accruing as a result of such transfer. This section has been inserted by the Finance Act, 2002 with e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and or building or both', then section 50C will cease to apply. From the facts of this case narrated above, it is seen that the assessee was allotted lease right in the Plot for a period of sixty years, which right was further assigned to 'P' in the year in question. It is axiomatic that the lease right in a shop plot neither is 'land or building or both' as such, nor can be included within the scope of 'land or building or both'. 23. Considering the fact that dealing with special provision for full value of consideration in certain cases under section 50C, which is a deeming provision, the fiction created in this section cannot be extended to any asset other than those specifically provided therein. As section 50C applies only to a capital asset, being land or building or both, it cannot be made applicable to lease rights in a land. As the assessee transferred lease right for sixty years in the Plot and not land itself, the provisions of section 50C cannot be invoked. 24. In view of the above findings, we allow ground no. 2 raised by the appellant. 25. Ground no.3: This ground is in respect of the addition made in respect of mortgage expenses i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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