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TMI Blog2017 (5) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... to its Managing Director. The provisions of the Section 50C are applicable in the case of transfer of land and building including depreciable capital asset. In the instant case, the property has been transferred to Mrs. Alka B Birewar, the Managing director of the assessee company for ₹ 30 lakhs against the stamp duty valuation of the property of ₹ 1,42,83,000/ -. The Hon'ble Bombay High court in the case of Bhatia Nagar Premises Co-Operative society Ltd. [2010 (3) TMI 813 - Bombay High Court] had an occasion to consider the scope of on 50 C and it is held by their Lordships that Section 50C is a measure provided to bridge the gap as it was found that the assessee were not correctly declaring the full value of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. 3. In its order u/s.263, CIT observed that while computing the short term capital loss on residential property, the value of sale consideration i.e. ₹ 30 lakhs was reduced from the WDV of residential property which was ₹ 74,87,519 and in this manner the loss of ₹ 44,87,519/- was arrived at by the assessee. It is seen from sale deed that the residential property was purchased on 16.11.2003 for ₹ 1,04,47,003/- and sold during the year to Mrs. Alka B Birewar, the managing director of the assessee company for ₹ 30,00,000/ - against the stamp duty valuation of the property of ₹ 1,42,83,000/-. On perusal of the records, it is found that the Assessing Officer has failed to adopt value of the property as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to ₹ 65,77,156/- as per books. The said loss is reflected under Schedule Q to the Profit Loss A/ c which is on the Page 10 of the Paperbook. 7. The assessee has reduced from the Net profit as per the Profit Loss A/ c profit amounting to ₹ 1,09,00,343/- as The said profit is reflected under Schedule N the Profit Loss A/ c which is on Page 9 of the Paperbook. The above items have been separately shown on Page 2 of the assessment order in the Computation of Total Income made by the AO, which shows application of mind by the AO. The Computation of Short Term Capital Gain under section 50 is reflected on Page 3 of the Paperbook and the STCG (Net) of ₹ 33,76,849/- is offered as Income In the Computation of Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts is concluded by the Bombay High Court decision dated 7th March, 2005 in the case of ACE Builders Pvt. Ltd. 281 ITR 210 holding that benefit under section 54 EC can be claimed in respect of capital gain computed under section 50 where the assets are long term. The said decision has been approved by the Supreme Court in the case of CIT V/s. V. S. Dempo Co. Ltd. 387 ITR 354. He further contended that the issue with regard to applicability of Section 50 C to the depreciable assets remains debatable till the issue is finally settled by the judgment of the Supreme Court. It is very likely that this issue may be pending for final hearing at the High Court stage in India and therefore until the Supreme Court decides this issue, the same will rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f hearing before us. 13. From the record, we found that the assessee company has sold the property and shown sale consideration at ₹ 30 lakh whereas the stamp duty value of the property ₹ 1,42,83,000/- and accordingly the Assessee arrived at loss of ₹ 44,87,519/- on sale of the residential property. While passing the order u/s.143(3), the AO has not uttered a single word with regard to applicability of provisions of Section 50C in respect of building sold by assessee to its Managing Director. 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 50C contains a special provision for determining full value of consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, therefore, it is wrong to hold that issue is covered by the decision of Calcutta High Court. In the instant case, the Assessing Officer has erred by not taking the sale value of the property as adopted by the Stamp Duty Authority .i.e sale value as per Section 50C of the I T Act. Further, the Hon'ble ITAT in case of Rallis India Ltd., vs. Addl. CIT (IT Appeal No.2464 (Mum) of 2010) also held that the applicability of provisions of Section 50C in the case of depreciable asset is now squarely covered by the ITAT Mumbai Special Bench in ITO vs. United Marine Academy (2011) 130 ITD 113 (Mum). 15. In view of the above discussion, we can safely conclude that not applying the provisions of Section 50C to the facts of the instant case h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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