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TMI Blog2016 (9) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of assessee Scope of section 50C - transferred the asset through unregistered “Deed of assignment” prior to 1.10.2009 - Held that:- Section 50C was not applicable to the case of the assessee during the relevant period as the sale agreement in question was unregistered document and was not assessed by the stamp valuation authorities. The word “assessable” has been incorporated only w.e.f. 1.10.2009 (Finance Act 2009), therefore, provision of section 50C will not apply on unregistered documents. Hence learned CIT(A) wrongly confirmed the action of the Assessing Officer regarding substitution of full value consideration from ₹ 1200/- per square meter to ₹ 1300/- square meter by applying provisions of section 50C of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is bad in law. 3. Facts of the case are that the assessee is a private limited company engaged in the activities of letting out of property and providing services such as supplying water, continuous electricity, maintenance of garden and other facilities that may be required. The assessee filed its return of income on 17.1.2006 declaring income of ₹ 6,09,698/- which was processed u/s. 143(1) and thereafter the assessment has been completed u/s 143(3) on 30.10.2008 determining total income at ₹ 42,53,560/-. During the course of assessment proceedings the Assessing Officer treated the income from capital gain as short term capital gain instead of long term capital gain as claimed by the assessee by invoking provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being treated as income from house property. Learned AR referred that rent received from the tenants was shown in the return and the same was being assessed under the head income from house property and the assessee has never claimed depreciation on the building and even no depreciation was allowed by the Department and therefore there is no application of section 50 of the Act. Lastly it was submitted that in those circumstances building cannot be treated as business asset therefore the findings recorded by CIT(A) need to be reversed. 5. Learned DR appearing on behalf of the Revenue supported the order passed by the tax authorities. 6. We have considered the rival submissions and perused the material available on record and orders p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of calculating long term capital gain indexed cost is to be calculated for both plot as well as structure. We rely upon the decision in the case of Divine Construction Co. Vs. ACIT (49 SOT 6) wherein it was held that for application of section 50 it is necessary that depreciation should have never been allowed on such capital asset. Value of this property as appearing in balance sheet for assessment year under consideration at ₹ 8,91,460/- continues to remain the same since its purchase in 1999, which shows that no depreciation was ever allowed or claimed. Thus section 50 cannot be applied. Order impugned is overturned and it is held that long term capital gain declared by the assessee be accepted as such . We also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduced w.e.f. 1.10.2009 and without giving opportunity of being heard before using ₹ 1300/- per square meter as full value consideration is bad in law. Therefore findings of learned CIT(A) deserves to be aside. On the other hand learned Departmental Representative supported the orders passed by the tax authorities. 8. We have considered the rival submissions and perused the record. On perusal of section 50C of the Income Tax Act, 1961 it is apparent on the face of the record that the word assessable was introduced w.e.f. 1.10.2009 and the asset in the present case was transferred through unregistered documents therefore from bare perusal the provisions of section 50C are not attracted in the case of the assessee. In the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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