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TMI Blog2017 (3) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... eration in relation to sale of leasehold interest in plot at Jalgaon and Dombivali - Held that:- Provisions of section 50 were not applicable to leasehold land/building. See Commissioner of Income Tax Versus M/s. Greenfield Hotels & Estates Pvt. Ltd. [2016 (12) TMI 353 - BOMBAY HIGH COURT ] Computation of Short-Term Capital Gain (STCG) derived from transfer of units of any equity oriented mutual fund - Held that:- During the course of hearing before us it was stated that the AO had levied the tax on STCG at the rate of 30% (plus applicable surcharge)as against the rate of 10% (plus applicable surcharge). We find that the FAA has not passed and speaking order in that regard stating that issue raised by the assessee is not arising out of the assessment order. Calculation of taxes is made in the tax demand notice and if the AO does not apply correct rate of taxes, it is duty of the FAA to decide the issue. Therefore, we direct him to adjudicate the issue , raised before him , by passing and speaking order i.e. to decide the rate of taxes applicable to STCG for the year under consideration. Third ground of appeal is allowed in favour of the assessee, in part. - ITA/2671/Mum/2011 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment of the Hon ble Bombay High Court delivered in the case of Godrej Boyce Manufacturing Company,the AO should provide reason - able opportunity of hearing to the assessee for determining the expenditure related to income which was not forming part of the total income. 2.2. During the course of hearing before us,the AR stated that the assessee had made Suo motu disallowance with regard to exempt income, that the provisions of rule 8D were not applicable for the year under consideration, that the loan was sanctioned for specific purposes, that the assessee had sufficient results and surplus to make investment he referred to the cases of Marico Ltd.(ITA/8858/Mum/2011-AY.2007-08,ITA/8713/Mum/2011, dated 18/05/2016) and Allahabad Bank(ITA/466/Kol/2013-AY.2002-03,dtd.13/01/2016 and argued alternatively that the disallow - ance should be restricted to reasonable limit.The Departmental Representative (DR) stated that matter could be decided on merits. 2.3. We have heard the rival submissions and perused the material before us. We find that the AO had applied the provisions of rule 8D for making disallowance u/s. 14 A of the Act. The honorable Bombay High Court has already held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d all the rights, title, interest and possession to the buyer.Accordingly,he took the stamp valuation is deemed value of considera - tion for computing the income as per the provisions of section 50.He calculated the capital gain in respect of the above property and held that LTCG worked out to ₹ 1.66 crores and ₹ 2.28 crores respectively for the Dombivali and Jalgaon property respectively. 3.1. Before the FAA, the assessee argued that provisions of section 50 C were not applicable to leased lands.After considering the submission of the assessee and the assessment order,he held that the provisions of section 50 were applicable as the assessee had transport the leasehold land at to localities, that the right in the leasehold land was a capital assets.Referring to the assignment date,the FAA further held that the assessee had not only transport the right of leasehold but had transport the specific area of plot of land, that the claim made by the assessee about non-transferring the land and building was factually incorrect, that leasehold right was nothing but a right over the land and building. Finally upheld the order of the AO. Besides he issued a notice u/s.251 (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has accepted the claim of the assessee and held that provisions of section 50C, is not applicable in assessee's case where the assessee has sold the lease hold rights. The learned CIT(A) has followed the decision of the Tribunal, Mumbai Bench, in Atul G. Puranik v/s ITO, ITA no.3051/Mum./2010, order dated 13th May 2011. 12. Before us, the learned Departmental Representative has submitted that there is no difference in the title of the property in question being the land, therefore, the provisions of section 50C, are applicable in the case of assessee. He relied on the order of the Assessing Officer. 13. The learned Counsel for the assessee, on the other hand, submitted that the lease hold rights cannot be equated with the ownership of the land and, therefore, the deemed provisions of section 50C, cannot be applied in case of transfer of lease hold rights. He has relied upon the following decisions:- i) ITO v/s Pradeep Steel Re-rolling Mills Pvt. Ltd., [2013] 155 TTJ 294 (Mum.); ii) Atul G. Pauranik v/s ITO, ITA no.3051/Mum./2010, order dated 13th May 2011; and iii) Shri Hemant R. Tandel, ITA no.1934, 1835, 1935, 1836, 1941, 1837/Mum./2012, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue. Respectfully, following the above judgement of the honorable Bombay High Court and the order of the Tribunal, we decide the 2nd ground of appeal in favour of the assessee. 4. Last ground of appeal is about computation of Short-Term Capital Gain (STCG) of ₹ 40.77 lakhs derived from transfer of units of any equity oriented mutual fund.During the course of hearing before us it was stated that the AO had levied the tax on STCG at the rate of 30% (plus applicable surcharge)as against the rate of 10% (plus applicable surcharge). We find that the FAA has not passed and speaking order in that regard stating that issue raised by the assessee is not arising out of the assessment order. Calculation of taxes is made in the tax demand notice and if the AO does not apply correct rate of taxes, it is duty of the FAA to decide the issue. Therefore,we direct him to adjudicate the issue , raised before him , by passing and speaking order i.e. to decide the rate of taxes applicable to STCG for the year under consideration. Third ground of appeal is allowed in favour of the assessee, in part. A result,appeal filed by the assessee stands partly allowed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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