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TMI Blog2022 (7) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... right of the buyer had been converted into ownership rights by the sale deed under consideration, where the assessee was shown to the landlord property - HELD THAT:- What the assessee has transferred are leasehold rights in the property which vested in him, to the tenant of the property. The same is evident from the terms of Agreement of Ownership In view of the consistent position taken by various Courts/Tribunals on this issue, we hold that Ld. CIT(Appeals) erred in facts and law in holding that what the assessee transferred were ownership rights in the property in question and therefore provisions of section 50C of the Act applied to transfer of rights in the impugned property. What we note is that the assessee itself had leaseh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That alternatively and without prejudice to the above, the Learned C.I.T. (A) - 2, Rajkot has grievously erred in confirming the addition made u/s 50C of the of Rs.82,27,950/- 02 That the appellant craves for leave to add, amend or modify the grounds of appeal. 3. The brief facts of the case are that the assessee is a cooperative Society engaged in the business of banking and is a duly recognised multistate scheduled bank. During the year under consideration, the assessee filed its original return of income declaring a taxable income of Rs. 6,09,18,830/- which included long-term capital gains of ₹ 43,82,175/-. The original assessment was completed at a taxable income of ₹ 13,73,38,960/-, however, the long-term capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. On merits, Ld. CIT(Appeals) dismissed the appeal of the assessee by holding that what the assessee was sold was not a leasehold property, but the ownership rights in the property had been transferred under the impugned sale deed and therefore tenancy right of the buyer had been converted into ownership rights by the sale deed under consideration, where the assessee was shown to the landlord property. While dismissing the appeal on merits, Ld. CIT(Appeals) made the following observations: 3.1.4 Decision Having considered facts and circumstances of the case and rival contentions I find that the assessee in the Return of Income had declared capital gain in respect of sale of only one property on 02/03/2009 for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gains on the aforesaid property was duly reflected in the return of income filed by the assessee and drew our attention to page 2 of the paper book to show that an amount of ₹ 43,82,175/-were offered as capital gains in the computation of income for the impugned assessment year. The counsel for the assessee further submitted that the assessee had sold leasehold rights in respect of 50 properties situated in Sitaram building, and furnished before us a list of such properties transferred to various persons. He submitted that the assessee had only sold the lessor rights in such property to the tenants, and this fact was brought to the attention of the AO during the course of assessment proceedings, which he refused to take on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned sale deed. He relied on pages 61-73 of the paper book to contend that various judicial precedents have held that section 50C of the Act is not attracted in case of transfer of leasehold rights in the property. The Ld. DR in response relied upon the Lucknow ITAT decision in the case of Shri Hari Om Gupta in ITA number 222/LKW/2013 , held that leasehold right of the land for 99 years is a capital asset to which the provisions of section 50C of the Act are applicable. 6. We have heard the rival contentions and perused the material on record. Interestingly, in case of Shri Hari Om Gupta in ITA number 222/LKW/2013[2017] 82 taxmann.com 398 (Lucknow - Trib.) ,on which reliance has been placed by the Department, the ITAT has held thatp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts/Tribunals on this issue, we hold that Ld. CIT(Appeals) erred in facts and law in holding that what the assessee transferred were ownership rights in the property in question and therefore provisions of section 50C of the Act applied to transfer of rights in the impugned property. What we note is that the assessee itself had leasehold rights in the said property and hence in instant facts, the assessee cannot transfer/confer ownership rights in the said property in favour of the tenant. Further, the assessee has also produced before us a list of 50 properties in respect of which leasehold rights were transferred by the assessee in the same premises i.e. Sitaram building. The Department has only questioned the transfer value in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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