ITO 22(3)(2), NAVI MUMBAI V. MEGHI PARBAT PATEL, NAVI MUMBAI

ITA 6390/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2287 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 16-10-2014
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KR SINGHDR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Question of law; Fair market value
• Section: 143(3); 50C; 147; 148; 11

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.6390/MUM/2014 ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER - 22(3)(2) 3 RD FLOOR, ROOM NO.307, TOWER NO.6, VASHI RLY STATION COMPLEX, VASHI, NAVI MUMBAI / VS. SHRI MEGHJI PARBAT PATEL, PROP. G.D.ENTERPRISES, FLAT B-5, PLOT NO.46, ANAND NIKETAN CHS, VASHI, NAVI MUMBAI-400705 ( ' / REVENUE) ( #$ % /ASSESSEE) P.A. NO. AFMPP7902H ' / REVENUE BY SHRI PRADEEP KR. SINGH-DR #$ % / ASSESSEE BY MS. RITIKA AGARWAL ' ( % ) / DATE OF HEARING : 26/10/2016 ( % ) / DATE OF ORDER: 26/10/2016 SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 18/07/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED PERTAINS TO HOLDING THAT SEC TION 50C OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) CANN OT BE APPLIED TO TRANSFER OF PLOT ACQUIRED BY THE ASSESSE E ON LEASE HOLD BASIS FROM CIDCO WITHOUT APPRECIATING THAT THE ASSET SOLD BY THE ASSESSEE WAS PLOT OF LAND BEING LAND A ND BUILDING INCLUDING ANY RIGHT THEREIN AND FURTHER DIRECTING T HE ASSESSING OFFICER TO COMPUTE CAPITAL GAIN BY TAKING THE ACTUA L AMOUNT RECEIVED BY THE ASSESSEE AS FULL VALUE OF CONSIDERA TION AS AGAINST THE VALUE ADOPTED FOR STAMP DUTY VALUATION, CONSIDERED BY ASSESSING OFFICER. 2. DURING HEARING, THE LD. DR, SHRI PRADEEP KUMAR SINGH, ADVANCED ARGUMENTS WHICH IS IDENTICAL TO THE GROUND RAISED BY DEFENDING THE INVOCATION OF SECTION 50C B Y THE ASSESSING OFFICER AND CONSEQUENT ADDITION. ON THE OTHER HAND, MS. REETIKA AGARWAL, LD. COUNSEL FOR THE ASSE SSEE DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER AND PLACE RELIANCE UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI FARID GULMOHAMED VS INCOME TAX OFFICER (ITA NO.5136/MUM/2014) ORDER DATED 16/03/2016. THIS FAC TUAL ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY L D. DR. SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 3 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION F ROM THE AFORESAID ORDER DATED 16/03/2016 FOR READY REFERENC E AND ANALYSIS:- 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y . 2010-11 ON 21.07.2010 DECLARING INCOME OF RS. 4,14,78,131/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX AC T, 1961 (IN SHORT 'THE ACT') AND THE CASE WAS SUBSEQUENTLY TAKE N UP FOR SCRUTINY. IN THE COURSE OF ASSESSMENT PROCEEDINGS I T WAS OBSERVED THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE H AD ASSIGNED LEASEHOLD RIGHT IN A PROPERTY SITUATED AT 16, NAPEA N SEA ROAD, MUMBAI TO M/S. ORBIT DWELLING PVT. LTD. FOR A TOTAL CONSIDERATION OF RS. 90,00,000/-, WHEREAS THE MARKET VALUE OF THE SAID P ROPERTY WAS DETERMINED BY THE STAMP VALUATION AUTHORITY, MU MBAI AT RS. 3,41,59,500/-. ON THE BASIS OF THE VIEW THAT INCOME ESCAPED ASSESSMENT DUE TO THE DIFFERENCE BETWEEN THE VALUE OF THE PROPERTY DETERMINED BY THE STAMP VALUATION AUTHORITY AND THE CONSIDERATION AS DECLARED BY THE ASSESSEE, THE ASSE SSING OFFICER (AO) INITIATED PROCEEDINGS UNDER SECTION 147 OF T HE ACT TO BRING TO TAX INCOME OF THE ASSESSEE WHICH HE HAD REASON TO B ELIEVE ESCAPED ASSESSMENT. NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 29.03.2012. THE ASSESSMENT WAS COMPLETE D UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 11.03.20 13 DETERMINING THE ASSESSEES INCOME AT RS. 6,21,37,650/- WHEREIN, INTER ALIA, THE AO INVOKING THE PROVISIONS OF SECTION 50C OF THE AC T COMPUTED THE LONG TERM CAPITAL GAIN (LTCG) OF THE AFORESAID PROP ERTY AT RS. 3,03,82,674/-. ON APPEAL, THE LEARNED CIT(A)-10, MU MBAI DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED O RDER DATED 28.02.2014. SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 4 2. AGGRIEVED BY THE ORDER OF THE CIT(A)-10, MUMBAI DAT ED 28.02.2014 FOR A.Y. 2010-11, THE ASSESSEE HAS PREFE RRED THIS APPEAL RAISING THE FOLLOWING GROUNDS OF APPEAL: - 1) A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 10, MUMBAI [HEREINAFTER REFERRED TO AS 'THE LEARNED CIT(A)'] ERRED IN UPHOLDING THE ACTION OF THE INCOME TAX OFFICER (INT ERNATIONAL TAXATION), RANGE 3(L) [HEREINAFTER REFERRED AS 'T A SSESSING OFFICER] IN APPLYING THE PROVISIONS OF SECTION 50C OF THE INCOM E TAX ACT, 1961 (THE ACT) AND THEREBY CONSIDERING THE VALUE ADOPTED BY STAMP VALUATION AUTHORITIES AS THE SALES CONSIDERATION AG AINST THE ACTUAL CONSIDERATION RECEIVED OR THE VALUE DETERMINED BY G OVERNMENT AUTHORISED VALUER, WHILE COMPUTING LONG TERM CAPITA L GAINS ON TRANSFER OF THE FIRE-SHORE LAND. B) THE APPELLANT SUBMITS THAT: (I) THE LAND BELONGED TO THE COLLECTOR OF MUMBAI AND IS NOT OWNED BY HIM BUT HAS BEEN LEASED TO HIM AND HE HAS ONLY 16.66% SHARE IN IT; (II) AS PER A COVENANT ON THE LEASE LAND, IT IS TO BE US ED ONLY AS GARDEN, SWIMMING POOL ETC. AND NO STRUCTURE CAN BE BUILT ON THE SAME; (III) THE LAND FILLS IN THE CRZ ZONE AND HENCE DOES NOT F ETCH A FAIR MARKET VALUE; (IV) THE FORE-SHORE LAND HAS ALWAYS BEEN BARREN AND TILL DATE OF SALE, THERE WAS NO PERMANENT STRUCTURE ON IT. THE APPELLANT, THEREFORE, SUBMITS THAT THE LEARNED CIT(A) FILED TO APPRECIATE THAT THE SAID LAND CANNOT FETCH FIR MARK ET VALUE. 2) A) WITHOUT PREJUDICE TO WHAT HAS BEEN STATED A BOVE, THE APPELLANT SUBMITS THAT THE LEARNED CIT(A) HAS ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO MAKE A REFERENCE TO THE VA LUATION OFFICER FOR DETERMINING THE FLIT MARKET VALUE OF THE AFORESAID LAND. B) THE LEARNED CIT(A) ERRED IN HOLDING THAT THE A PPELLANT HAS NOWHERE OBJECTED TO THE PRICE DETERMINED BY THE STA MP VALUATION AUTHORITY IGNORING THE FLICT THAT THE APPELLANT HAS RAISED THE AFORESAID OBJECTION VIDE HIS COMPUTATION OF TOTAL I NCOME FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS VID E SUBMISSIONS MADE DURING THE SAID PROCEEDINGS. 3) THE APPELLANT SUBMITS THAT THE ASSESSING OFFICE R BE DIRECTED TO ACCEPT THE SALES CONSIDERATION FOR THE SAID LAND AT RS.1,35,00,000/- AND MODIFY THE ASSESSMENT ACCORDIN GLY AS PER THE PROVISIONS OF LAW. 4) EACH OF THE ABOVE GROUNDS OF APPEAL ARE INDEPEN DENT AND WITHOUT PREJUDICE TO EACH OTHER. 5) THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, AM END AND/OR MODIFY THE GROUNDS OF APPEAL AS AND WHEN GIVEN. 3. IN THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSE E FILED THE FOLLOWING ADDITIONAL GROUNDS OF APPEAL: - SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 5 1. THE ASSESSING OFFICER AS WELL AS THE LEARNED CI T(A) HAD ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE PROVISION S OF SECTION 50C OF THE ACT ARE NOT APPLICABLE IN RESPECT OF LEASEHOLD RIGH TS IN FORESHORE LAND. 2. THE APPELLANT CRAVES TO ADD, AMEND, ALTER OR DEL ETE ANY OR ALL GROUNDS OF APPEAL. 4.1 THE LEARNED A.R. FOR THE ASSESSEE PRAYED FOR A DMISSION OF THE ADDITIONAL GROUNDS RAISED (SUPRA) FOR CONSIDERA TION AND ADJUDICATION IN THIS APPEAL, REITERATING THE ARGUME NTS PUT FORWARD BY THE ASSESSEE IN HIS PRAYER FOR ADMISSION OF THE SAME. IT WAS SUBMITTED THAT THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE IN RESPECT OF THE LEARNED CIT(A) CONFIRMING THE ADDITI ON MADE BY THE AO BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT AND IN ADOPTING THE STAMP DUTY VALUE IN RESPECT OF ASSIGNM ENT OF LEASEHOLD RIGHTS IN THE SAID LAND BY THE ASSESSEE. IT IS FURTHER SUBMITTED THAT AS A MATTER OF ABUNDANT PRECAUTION, THE ASSESSEE HAS SOUGHT TO RAISE A SPECIFIC GROUND CHALLENGING T HE APPLICABILITY OF THE PROVISIONS OF SECTION 50C OF THE ACT ON THE TRANSFER OF LEASEHOLD RIGHTS ON LAND. IT WAS SUBMITTED THAT THE ADDITIONAL GROUNDS IS MERELY A LEGAL ISSUE WHICH GOES TO THE R OOT OF THE MATTER AND ALL THE FACTS MATERIAL TO THE ISSUE RAISED ALRE ADY FORM A PART OF THE RECORD. IN SUPPORT OF THE PROPOSITION THAT THE TRIBUNAL HAS POWERS TO ADMIT AND CONSIDER QUESTION OF LAW NOT RA ISED EARLIER, RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONO UNCEMENTS: - (I) NATIONAL THERMAL POWER CORPORATION (229 ITR 383 ) (SC) (II) JUTE CORPORATION OF INDIA LTD. (187 ITR 688 (S C) (III) AHMEDABAD ELECTRICITY CO. LTD. ()199 ITR 351) (BOM) 4.2 WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LEAR NED A.R. FOR THE ASSESSEE AND THE LEARNED D.R. FOR REVENUE AND P ERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUD ING THE JUDICIAL PRONOUNCEMENTS CITED. FROM AN APPRECIATION OF THE M ATERIAL ON RECORD AND THE JUDICIAL PRONOUNCEMENTS CITED, WE AR E OF THE CONSIDERED OPINION THAT SINCE THE ADDITIONAL GROUND RAISED IS A PURELY LEGAL GROUND THAT GOES TO THE ROOT OF THE MA TTER AND THAT ALL THE FACTS CONCERNED ARE ALREADY A PART OF RECORD, I N THE INTEREST OF EQUITY AND JUSTICE THE ADDITIONAL GROUND (SUPRA) BE ADMITTED FOR SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 6 CONSIDERATION AND ADJUDICATION IN THIS APPEAL. IT I S ORDERED ACCORDINGLY. WE WILL NOW PROCEED TO DISPOSE OFF THE ADDITIONAL GROUNDS OF APPEAL. 4. ADDITIONAL GROUNDS OF APPEAL (S. NOS. 1 & 2) 5.1 IN THE ADDITIONAL GROUNDS AND THE GROUNDS AT S . NOS. 1 & 3 THE ASSESSEE ALLEGES THAT THE AUTHORITIES BELOW HAD ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE PROVISION S OF SECTION 50C OF THE ACT ARE NOT APPLICABLE IN RESPECT OF TRANSFE R OF LEASEHOLD RIGHTS. THE LEARNED A.R. FOR THE ASSESSEE VEHEMENTL Y ARGUED THAT IN THE CASE ON HAND SINCE THE ASSIGNMENT OF LEASEHOLD LAND DID NOT INVOLVE THE TRANSFER OF LAND AND BUILDING AS CONTEM PLATED UNDER SECTION 50C OF THE ACT, HENCE THE PROVISIONS OF SEC TION 50C OF THE ACT WOULD NOT BE ATTRACTED. IN THIS REGARD, THE LEA RNED A.R. FOR THE ASSESSEE REFERRED TO THE PROVISIONS OF SECTION 50C OF THE ACT TO POINT OUT THAT IT COVERS CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH AND NOT THE RIGHTS IN LAND AND BUILDING. THE A VERMENT OF THE LEARNED A.R. FOR THE ASSESSEE IS THAT THE WORD LAN D USED IN SECTION 50C OF THE ACT DOES NOT INCLUDE LEASEHOLD R IGHTS IN LAND AND THE SAID EXPRESSION LAND IS ONLY WITH RESPECT TO LANDS WHICH ARE OWNED BY THE ASSESSEE AS SUCH. IT IS FURTHER SU BMITTED THAT SECTION 50C OF THE ACT BEING A DEEMING PROVISION, T HE FICTION CREATED THEREIN CANNOT EXTEND TO ANY OTHER ASSET TH AN THOSE PROVIDED FOR SPECIFICALLY. IN SUPPORT OF THIS PROPO SITION, THAT THE PROVISIONS OF SECTION 50C OF THE ACT ARE NOT ATTRAC TED IN CASE OF TRANSFER OF LEASEHOLD RIGHTS IN LAND, THE LEARNED A .R. FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS OF VARIOUS BENCHES OF THE ITAT: - (I) ACIT VS. NADIR NAZARALI DHANANI (ITA NO. 100/MU M/2013 DATED 09.10.2015) (II) KUMARPAL MOHANLAL JAIN VS. ITO (ITA NO. 7231/M UM/2010 DATED 30.11.2015) (III) ATUL G. PURANIK VS. ITO (132 ITD 499) (IV) ITO VS. HARI OM GUPTA (45 ITR (TRIB) 137) (V) ITO VS. PRADEEP STEEL RE-ROLLING MILLS (P) LTD. (155 TTJ 294) SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 7 VI) KANCAST P. LTD. VS. ITO (68 SOT 110) 5.2 PER CONTRA, THE LEARNED D.R. FOR REVENUE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND C ONTENDED THAT SECTION 50C OF THE ACT IS A SPECIAL PROVISION FOR COMPUTING CAPITAL GAINS IN CERTAIN CASES AND WOULD INCLUDE NOT ONLY LAND AS SUCH BUT ALSO LEASEHOLD RIGHTS IN LAND. 5.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUD ING THE JUDICIAL PRONOUNCEMENTS CITED. THE FACTS THAT EMANA TE FROM THE RECORD ARE THAT THE ASSESSEE HAD INHERITED 16.6 6% LEASEHOLD RIGHTS IN LAND SITUATED AT NAPEAN SEA ROA D, MUMBAI. THE ASSESSEE TRANSFERRED HIS SHARE THEREIN TO ORBIT DWELLING PVT. LTD. BY WAY OF DEED OF ASSIGNMENT DAT ED 11.12.2009 FOR A CONSIDERATION OF RS. 90 LAKHS NET OF TAX; THE GROSS AMOUNT OF SALE CONSIDERATION BEING DETERMINED AT RS. 1,35,00,000/-. THE SAID LEASEHOLD RIGHTS IN THE LAN D AT NAPEAN SEA ROAD WAS ACQUIRED ON 27.11.1953 FOR A PE RIOD OF 99 YEARS FROM THE GOVERNOR OF BOMBAY. 5.3.2 IN THE COURSE OF ASSESSMENT PROCEEDINGS THE A O NOTICED THAT THE VALUE OF THE SAID LAND AT NAPEAN S EA ROAD WAS ADOPTED AT RS. 3,41,51,500/- BY THE REGISTERING AUTHORITY FOR STAMP DUTY PURPOSE. THE AO, INSTEAD OF TAKING T HE CONSIDERATION FOR THE TRANSFER OF THE LEASEHOLD RIG HTS IN THE SAID PROPERTY AT NAPEAN SEA ROAD AT RS. 1,35,00,000/-, INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT, T OOK THE VALUE OF CONSIDERATION FOR TRANSFER OF THE SAID FOR ESHORE PROPERTY AT NAPEAN SEA ROAD AT RS. 3,41,59,500/-, AS ADOPTED BY THE REGISTERING AUTHORITY FOR STAMP DUTY PURPOSE S, AND COMPUTED THE CAPITAL GAINS ARISING FROM THE SAID TR ANSACTION ACCORDINGLY. SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 8 5.3.3 ON APPEAL BEFORE THE LEARNED CIT(A), THE ASSE SSEE REITERATED HIS STAND THAT HE IS ONLY HOLDING LEASEH OLD RIGHTS IN THE SAID LAND AND THAT HE IS NOT THE OWNER OF TH E LAND, THE OWNERSHIP OF THE LAND BELONGS TO THE COLLECTOR MUMB AI. IT WAS ALSO SUBMITTED THAT SINCE THE SAID LAND FALLS I N THE CRZ ZONE, THERE WAS WERE MANY RESTRICTIONS AS TO THE PU RPOSES THE SAME COULD BE UTILIZED AND ITS TRANSFER THEREFO RE DID NOT FETCH THE PRICE DETERMINED BY THE STAMP DUTY VALUAT ION AUTHORITIES. THE ASSESSEE ALSO RAISED AN ADDITIONAL GROUND FOR REFERRING THE MATTER TO THE VALUATION OFFICER. THE LEARNED CIT(A), HOWEVER, WAS OF THE VIEW THAT THE AO WAS JU STIFIED IN APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT A ND CONSEQUENTLY REJECTED THE ASSESSEES PLEA. THE LEAR NED CIT(A) ALSO DID NOT FIND ANY JUSTIFICATION IN THE ASSESSEE S CONTENTIONS RAISED IN THE ADDITIONAL GROUND FOR GET TING THE SAID PROPERTY REFERRED TO VALUATION OFFICER. IN THE SE CIRCUMSTANCES THE LEARNED CIT(A) DISMISSED THE ASSE SSEES APPEAL. 5.3.4 WE FIND FROM THE RECORD THAT THERE IS NO DISP UTE THAT THE FORESHORE LAND AT NAPEAN SEA ROAD, MUMBAI IS A LEASEHOLD LAND FOR WHICH THE LEASEHOLD RIGHTS WERE ACQUIRED ON 27.11.1953 FOR A PERIOD OF 99 YEARS FROM THE GOV ERNOR OF BOMBAY AND THE OWNERSHIP OF WHICH VESTS IN THE COLL ECTOR OF MUMBAI. WE HAVE ALSO EXAMINED THE ISSUE OF INVOCATI ON OF THE PROVISIONS OF SECTION 50C OF THE ACT IN RESPECT OF LEASEHOLD RIGHTS IN LAND. WE FIND THAT THIS ISSUE H AS BEEN EXAMINED BY VARIOUS BENCHES OF THE TRIBUNAL, WHEREI N IT HAS BEEN CONSISTENTLY HELD THAT THE PROVISIONS OF SECTI ON 50C OF THE ACT CANNOT BE INVOKED IN TRANSACTION INVOLVING TRANSFER OF LEASEHOLD RIGHTS IN LAND OR BUILDING. RELEVANT PORT IONS THEREOF ARE EXTRACTED HEREUNDER. SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 9 5.3.5 IN THE DECISION OF THE COORDINATE BENCH OF TH IS TRIBUNAL IN THE CASE OF NADIR NAZARALI DHANANI (ITA NO. 100/MUM/2013 DATED 09.10.2015) AT PARA 7 THEREOF IT WAS HELD AS UNDER: - 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS EVIDENT FROM TH E ASSESSMENT ORDER, THE ASSESSING OFFICER HAS COMPUTED LONG TERM CAPITAL GAIN ON ASSIGNMENT OF LEASE HOLD RIGHTS OF THE PLOT BY TAKI NG THE MARKET VALUE AS PER SECTION 50C OF THE ACT ONLY FOR THE RE ASON THAT THE LEASE HOLD RIGHTS ARE FOR 60 YEARS, HENCE, FOR ALL PRACTI CAL PURPOSE, THE ASSESSEE SHOULD BE HELD TO BE THE OWNER OF THE PROP ERTY. HOWEVER, AS COULD BE SEEN FROM THE TERMS OF THE ALLOTMENT LE TTER, THE LEASE HOLD RIGHTS CONFERRED ON THE ASSESSEE IS ON CERTAIN TERMS AND CONDITIONS ATTACHED THERETO. THEREFORE, IT CANNOT B E SAID THAT THE ASSESSEE HAS ABSOLUTE RIGHTS OF AN OWNER. IN THIS C ONTEXT, A REFERENCE CAN BE MADE TO THE DECISION OF THE TRIBUN AL, PUNE BENCH, IN KANCAST PVT. LTD. V/S ITO, 55 TAXMAN.COM 171, WH EREIN THE CO ORDINATE BENCH, WHILE CONSIDERING THE APPLICATION O F PROVISIONS OF SECTION 50C, IN RESPECT OF TRANSFER OF LEASE HOLD R IGHTS OF 99 YEARS, HELD THAT AS THE ASSESSEE IS ONLY HAVING LEASE HOLD RIGHTS, THE PROVISIONS OF SECTION 50C WOULD NOT APPLY. IT WILL BE PERTINENT TO OBSERVE WHILE SO DECIDING, THE COORDINATE BENCH AL SO TOOK NOTE OF THE DECISION OF THE TRIBUNAL, MUMBAI BENCH IN SHAVO NORGREN PVT. LTD. (SUPRA). THE OTHER DECISIONS RELIED UPON BY TH E LEARNED COUNSEL FOR THE ASSESSEE ALSO EXPRESS SIMILAR VIEW. THEREFO RE, AS THE ASSESSEE WAS HAVING ONLY LEASE HOLD RIGHTS FOR A PE RIOD OF 60 YEARS, HE CANNOT BE CONSIDERED TO BE THE OWNER OF THE PROP ERTY SO AS TO COMPUTE CAPITAL GAIN BY ADOPTING THE MARKET VALUE A S PER THE PROVISIONS OF SECTION 50C OF THE ACT. IN THE AFORES AID VIEW OF THE MATTER, WE AGREE WITH THE DECISIONS OF THE LEARNED COMMISSIONER (APPEALS) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN. THUS, GROUND NO.1, RAISED BY THE REVE NUE IS DISMISSED. 5.3.6 IN THE CASE OF KUMARPAL MOHANLAL JAIN (ITA NO . 7231/MUM/2010 DATED 30.11.2015) THE COORDINATE BENC H OF THIS TRIBUNAL AT PARA 6 HAS HELD AS UNDER: - 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMIT TEDLY, THE MIDC HAS ORIGINALLY GIVEN THE LEASE OF THE LAND IN THE Y EAR 1964. THE ASSESSEE HAD PURCHASED THE LEASEHOLD RIGHTS IN THE PROPERTY IN 1991 FOR A SUM OF RS.9 LAKHS AND AFTER CARRYING OUT HIS BUSINESS FOR 15 YEARS HAD SOLD THE SAME FOR RS.25 LAKHS VIDE DEE D OF ASSESSMENT DATED 29.04.05. HENCE, THE ASSESSEE HAD SOLD THE LEASEHOLD RIGHTS FOR THE REMAINING PERIOD OF 55 YEA RS. A PERUSAL OF THE PROVISIONS OF SECTION 50C OF THE ACT REVEALS TH AT THE SAME ARE APPLICABLE FOR THE TRANSFER OF LAND OR BUILDING OR BOTH, HOWEVER, THE LEASEHOLD RIGHTS OR THE TENANCY RIGHTS ARE DIFFEREN T FROM THE SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 10 OWNERSHIP OF LAND OR BUILDING ITSELF. RELIANCE IN T HIS RESPECT CAN BE PLACED ON THE FOLLOWING DECISIONS: 1. KANCAST (P.) LTD. VS. ITO 2015 68 SOT 110 (PU NE TRIB.) 2. M/S. FORDHAM PRESSINGS (INDIA) PVT. LTD. VS. DC IT [ITA NO.6033/MUM/2010] DECIDED ON 25.04.2012 3. M/S. HEATEX PRODUCTS PVT. LTD. VS. ACIT [ITA NO .8197/MUM/2010] DECIDED ON 24.07.2013 4. ITO VS. M/S. PAWASKAR SHIPPING & TRADING COMPAN Y PVT. LTD. [ITA NO.872/MUM/2008] DECIDED ON 29.07.2011 IN VIEW OF THE SETTLED POSITION ON THIS ISSUE, THE SECTION 50C IS NOT APPLICABLE TO THE CASE IN HAND. HENCE, THE CAPITAL GAINS OFFERED BY THE ASSESSEE BY ADOPTING THE SALE CONSIDERATION ACT UALLY RECEIVED BY HIM ARE TO BE TAXED AS SUCH. WE, THEREFORE, DO N OT FIND ANY JUSTIFICATION ON THE PART OF THE LD. CIT(A) IN ADOP TING THE VALUE OF THE DVO. WE ACCORDINGLY DIRECT THE AO TO TAX THE CAPITA L GAINS ON THE ASSESSEE BY ADOPTING THE SALE VALUE OF THE PROPERTY AT RS.25 LAKHS AS OFFERED BY THE ASSESSEE. 5.3.7 IN THE CASE OF ATUL G. PURANIK VS. ITO (132 I TD 499) THE COORDINATE BENCH OF THIS TRIBUNAL AT PARA 11.4 HAS HELD AS UNDER: - 11.4 IN VIEW OF THE AFORENOTED JUDGMENTS RENDERED BY THE HONBLE APEX COURT AND THAT OF THE HONBLE JURISDICTIONAL H IGH COURT, IT IS CLEAR THAT A DEEMING PROVISION CAN BE APPLIED ONLY IN RESPECT OF THE SITUATION SPECIFICALLY GIVEN AND HENCE CANNOT GO BE YOND THE EXPLICIT MANDATE OF THE SECTION. TURNING TO SEC. 50C, IT I S SEEN THAT THE DEEMING FICTION OF SUBSTITUTING ADOPTED OR ASSESSED OR ASSESSABLE VALUE BY THE STAMP VALUATION AUTHORITY AS FULL VALU E OF CONSIDERATION IS ITA NO.3051/M/10 ATUL G. PURANIK 18 APPLICABLE O NLY IN RESPECT OF LAND OR BUILDING OR BOTH. IF THE CAPITAL ASSET UNDER TRANSFER CANNOT BE DESCRIBED AS RS.LAND OR BUILDING OR BOTH , THEN SEC. 50C WILL CEASE TO APPLY. FROM THE FACTS OF THIS CASE NA RRATED ABOVE, IT IS SEEN THAT THE ASSESSEE WAS ALLOTTED LEASE RIGHT IN THE PLOT FOR A PERIOD OF SIXTY YEARS, WHICH RIGHT WAS FURTHER ASSI GNED TO M/S. PATHIK CONSTRUCTION IN THE YEAR IN QUESTION. IT IS AXIOMATIC THAT THE LEASE RIGHT IN A PLOT OF LAND ARE NEITHER RS.LAND O R BUILDING OR BOTH AS SUCH NOR CAN BE INCLUDED WITHIN THE SCOPE OF RS. LAND OR BUILDING OR BOTH. THE DISTINCTION BETWEEN A CAPITAL ASSET B EING RS.LAND OR BUILDING OR BOTH AND ANY RS.RIGHT IN LAND OR BUILD ING OR BOTH IS WELL RECOGNIZED UNDER THE I.T. ACT. SEC. 54D DEALS WITH CERTAIN CASES IN WHICH CAPITAL GAIN ON COMPULSORY ACQUISITION OF LAN D AND BUILDING IS CHARGED. SUB-SEC.(1) OF SEC. 54D OPENS WITH : SUBJ ECT TO THE PROVISIONS OF SUB-SECTION (2), WHERE THE CAPITAL GA IN ARISES FROM THE TRANSFER BY WAY OF COMPULSORY ACQUISITION UNDER ANY LAW OF A CAPITAL ASSET, BEING LAND OR BUILDING OR ANY RIGHT IN LAND OR BUILDING, FORMING PART OF AN INDUSTRIAL UNDERTAKING... IT I S PALPABLE FROM SEC. 54D THAT RS.LAND OR BUILDING IS DISTINCT FROM RS.ANY RIGHT IN LAND OR BUILDING. SIMILAR POSITION PREVAILS UNDER THE W.T. ACT, 1957 SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 11 ALSO. SECTION 5(1) AT THE MATERIAL TIME PROVIDED FO R EXEMPTION IN RESPECT OF CERTAIN ASSETS. CLAUSE (XXXII) OF SEC. 5 (1) PROVIDED THAT THE VALUE, AS DETERMINED IN THE PRESCRIBED MANNER, OF THE INTEREST OF THE ASSESSEE IN THE ASSETS (NOT BEING ANY LAND O R BUILDING OR ANY RIGHTS IN LAND OR BUILDING OR ANY ASSET REFERRED TO IN ANY OTHER CLAUSES OF THIS SUB-SECTION) FORMING PART OF AN IND USTRIAL UNDERTAKING SHALL BE EXEMPT FROM TAX. HERE ALSO IT IS WORTH NOTING THAT A DISTINCTION HAS BEEN DRAWN BETWEEN RS.LAND O R BUILDING ON ONE HAND AND RS.OR ANY RIGHTS IN LAND OR BUILDING ON THE OTHER. CONSIDERING THE FACT THAT WE ARE DEALING WITH SPECI AL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES U/S.50 C, WHICH IS A DEEMING PROVISION, THE FICTION CREATED IN THIS SECT ION CANNOT BE EXTENDED TO ANY ASSET OTHER THAN THOSE SPECIFICALLY PROVIDED THEREIN. AS SEC. 50C APPLIES ONLY TO A CAPITAL ASST, BEING L AND 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 SEC.50C CANNOT BE IN VOKED. 5.3.8 IN THE CASE OF HARI OM GUPTA (45 ITR (TRIB) 1 37) (LUCKNOW), THE TRIBUNAL AT PARA 9 TO 11 THEREOF HAV E OBSERVED AND HELD AS UNDER: - 9. FROM THESE TRANSACTIONS, IT APPEARS THAT IT WAS A DISTRESS SALE AND THE MARKET VALUE OF THE PROPERTY CANNOT BE ASSE SSED FOR COMPUTING THE LONG TERM CAPITAL GAIN. MOREOVER, WE HAVE ALSO EXAMINED THE OTHER ASPECTS OF INVOCATION OF PROVISI ONS OF SECTION 50C OF THE ACT RELATING TO LEASEHOLD RIGHTS. THE IS SUE WAS EXAMINED BY DIFFERENT BENCHES OF THE TRIBUNAL IN A NUMBER OF CASES REFERRED TO BY THE ASSESSEE, IN WHICH THE TRIBUNAL HAS HELD THA T THE PROVISIONS OF SECTION 50C OF THE ACT CANNOT BE INVOKED IN TRAN SFER OF LEASEHOLD RIGHTS. 10. IN THE CASE OF KANCAST PVT. LTD. VS. INCOME TAX OFFICER, PUNE (SUPRA), THE PUNE BENCH OF THE TRIBUNAL HAS ELABORA TELY DISCUSSED THE ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNC EMENTS AND HAS CATEGORICALLY HELD THAT SECTION 50C OF THE ACT DOES NOT COME INTO OPERATION IN TRANSFER OF LEASEHOLD RIGHTS. THE RELE VANT OBSERVATIONS OF THE TRIBUNAL ARE EXTRACTED HEREUNDER FOR THE SAK E OF REFERENCE:- 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. SECTION 50C OF THE ACT PROVIDES THAT IF THE CONSIDERATION RECEI VED OR ACCRUING IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSAB LE BY THE STAMP VALUATION AUTHORITY OF THE STATE GOVERNMENT FOR SUC H TRANSFER THEN THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHAL L BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION AND THE CAPITAL GAINS WILL BE COMPUTED ACCORDINGLY. THE PHRASEOLOGY OF SECTION 50 C OF THE ACT CLEARLY PROVIDES THAT IT WOULD APPLY ONLY TO A CAP ITAL ASSET, BEING LAND OR BUILDING OR BOTH. THE MOOT QUESTION BEFORE US IS AS TO WHETHER SUCH EXPRESSION WOULD COVER THE TRANSFER OF A CAPITAL ASSET BEING LEASEHOLD RIGHTS IN LAND OR BUILDING. THERE C ANNOT BE A DISPUTE TO THE PROPOSITION THAT THE EXPRESSION LAND BY ITSE LF CANNOT INCLUDE WITHIN ITS FOLD LEASEHOLD RIGHT IN LAND ALSO. OF-CO URSE, LEASEHOLD RIGHT SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 12 IN LAND IS ALSO A CAPITAL ASSET AND WE FIND NO FAUL T WITH THIS STAND OF THE REVENUE. SO HOWEVER, EVERY KIND OF A CAPITAL A SSET IS NOT COVERED WITHIN THE SCOPE OF SECTION 50C OF THE ACT FOR THE PURPOSES OF ASCERTAINING THE FULL VALUE OF CONSIDERATION. IN -FACT, THE HEADING OF SECTION ITSELF PROVIDES THAT IT IS SPECIAL PROVISI ON FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. THEREFORE, THERE I S A SIGNIFICANCE TO THE EXPRESSION A CAPITAL ASSET, BEING LAND OR BUIL DING OR BOTH CONTAINED IN SECTION 50C OF THE ACT. THE SIGNIFICAN CE IS THAT ONLY CAPITAL ASSET BEING LAND OR BUILDING OR BOTH ARE CO VERED WITHIN THE SCOPE OF SECTION 50C OF THE ACT, AND NOT ALL KINDS OF CAPITAL ASSETS. 10. IN-FACT, THE MUMBAI BENCH OF THE TRIBUNAL IN TH E CASE OF ATUL G. PURANIK (SUPRA) WHICH WAS PRESSED INTO SERVICE BY T HE ASSESSEE BEFORE THE LOWER INCOME-TAX AUTHORITIES, CLEARLY BR INGS OUT THE AFORESAID PROPOSITION. IN OUR VIEW, THE SAID DECISI ON OF THE TRIBUNAL HAS BEEN WRONGLY DISREGARDED BY THE CIT(A). THE PLE A OF THE CIT(A) IS BASED ON THE MEANING OF EXPRESSION IMMOVABLE PR OPERTY CONTAINED IN EXPLANATION BELOW SECTION 269UA(D)(I) OF THE ACT. ACCORDING TO THE CIT(A), THE EXPLANATION BELOW SECT ION 269UA(D)(I) OF THE ACT MAKES IT CLEAR THAT THE LAND, BUILDING, ETC . INCLUDED IN THE PHRASE IMMOVABLE PROPERTY ALSO INCLUDES ANY RIGHT S THEREIN. THE CIT(A) HAS CORRELATED THIS TO SECTION 2(47) OF THE ACT WHICH DEFINES THE EXPRESSION TRANSFER IN RELATION TO CAPITAL AS SET. AS PER THE CIT(A), SECTION 2(47) OF THE ACT CONTAINS A REFEREN CE TO THE MEANING OF THE IMMOVABLE PROPERTY CONTAINED IN SECTION 26 9UA(D) OF THE ACT AND THEREFORE TRANSFER IN RELATION TO A CAPITAL ASS ET DEFINED IN SECTION 2(47) OF THE ACT WOULD INCLUDE WITHIN ITS P URVIEW TRANSFER OF A CAPITAL ASSET, BEING LEASEHOLD RIGHTS IN LAND ALS O. UPTO THIS STAGE, THERE CAN BE NO QUARREL WITH THE STAND OF THE CIT(A ). THE INCONGRUITY STARTS WHEN THE CIT(A) FURTHER GOES TO SAY THAT BEC AUSE OF THE AFORESAID PROVISIONS, IT WAS NOT NECESSARY TO MENT ION RIGHTS IN LAND OR BUILDING SPECIFICALLY U/S 50C OF THE ACT A LSO. 11. IN OUR CONSIDERED OPINION, THE POINT MADE BY TH E CIT(A) IS QUITE FALLACIOUS. FIRSTLY, IT HAS TO BE UNDERSTOOD THAT T HE MEANING OF THE EXPRESSION IMMOVABLE PROPERTY CONTAINED IN SECTIO N 269UA(D) OF THE ACT HAS BEEN REFERRED TO IN SECTION 2(47) OF TH E ACT ONLY IN RELATION TO SUB-CLAUSE (V) AND (VI) THEREOF. SECOND LY, FROM THE MEANING OF EXPRESSION IMMOVABLE PROPERTY CONTAINE D IN SECTION 269UA(D) OF THE ACT, THE ONLY THING THAT CAN BE INF ERRED IS THAT EVEN LEASEHOLD RIGHTS IN LAND IS A CAPITAL ASSET. HOWEVE R, THE SAID INFERENCE DOES NOT JUSTIFY THE INCLUSION OF A TRANS ACTION INVOLVING TRANSFER OF LEASEHOLD RIGHTS IN LAND WITHIN THE PUR VIEW OF SECTION 50C OF THE ACT. QUITE CLEARLY, SECTION 50C OF THE A CT APPLIES ONLY TO CAPITAL ASSET BEING LAND OR BUILDING OR BOTH. IT DO ES NOT APPLY TO LEASEHOLD RIGHTS IN THE LAND OR BUILDING. THE STAND OF THE CIT(A) THAT IT WAS NOT NECESSARY TO MENTION RIGHTS IN LAND OR BUILDING SPECIFICALLY IN SECTION 50C OF THE ACT, IN OUR VIEW , IS QUITE MISCONCEIVED. 12. APART FROM THE AFORESAID DISCUSSION, WE FIND TH AT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S PRADEEP ST EEL RE-ROLLING MILLS PVT. LTD. (SUPRA) HAS CONSIDERED AN IDENTICAL CONTROVERSY WHEREIN IT HAS BEEN HELD THAT SECTION 50C OF THE AC T WOULD APPLY SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 13 ONLY TO CAPITAL ASSET, BEING LAND OR BUILDING OR BO TH AND IT WOULD NOT APPLY IN RELATION TO LEASEHOLD RIGHTS IN LAND OR BU ILDING. TO THE SIMILAR EFFECT IS THE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF M/S JAIPUR TIMES INDUSTRIES (SUPRA). TH E JAIPUR BENCH OF THE TRIBUNAL FOLLOWED AN EARLIER DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SHAVO NORGREN (I) LTD. VS. DCIT VIDE ITA NO.8101 OF 2011 DATED 14.12.2012 TO HOLD THAT SECTI ON 50C OF THE ACT DOES NOT APPLY TO TRANSFER OF LEASEHOLD RIGHTS IN LAND. THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHRI YASIN MOOSA GODIL (SUPRA) IS ALSO ON SIMILAR LINES. 13. IN VIEW OF THE AFORESAID LEGAL POSITION AND IN THE ABSENCE OF ANY DECISION TO THE CONTRARY BROUGHT OUT BY THE REVENUE , WE CONCLUDE BY HOLDING THAT SECTION 50C OF THE ACT DOES NOT COME I NTO OPERATION IN THE PRESENT FACTS WHERE WHAT IS TRANSFERRED BY THE ASSESSEE IS ONLY THE LEASEHOLD RIGHTS IN LAND WHICH WERE ACQUIRED BY IT FROM MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION (I.E . MIDC) ON A 99 YEARS LEASE BASIS. AS A CONSEQUENCE, WE SET ASIDE T HE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO COMPUTE THE LONG TERM CAPITAL GAIN ON TRANSFER OF LEASEHOLD LAND BY ADOPT ING THE FULL VALUE OF CONSIDERATION OF RS.2,35,04,000/- DECLARED BY TH E ASSESSEE IN THE COMPUTATION OF INCOME AND ALLOW THE APPROPRIATE REL IEF TO THE ASSESSEE. THUS, ON THIS GROUND ASSESSEE SUCCEEDS. 11. SINCE IT HAS BEEN REPEATEDLY HELD BY DIFFERENT BENCHES OF THE TRIBUNAL THAT PROVISIONS OF SECTION 50C OF THE ACT CANNOT BE INVOKED IN RESPECT TO THE TRANSFER OF LEASEHOLD RIGHTS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY ADJUDI CATED THE ISSUE FOLLOWING THE ORDER OF THE TRIBUNAL. WE ACCORDINGLY CONFIRM THE SAME. 5.3.9 IN THE CASE OF KANCAST (P) LTD. (ITA NO. 1265 /PN/2011 DATED 19.01.2015) THE ITAT PUNE BENCH AT PARA 13 OF ITS ORDER HAS HELD AS UNDER:- 13. IN VIEW OF THE AFORESAID LEGAL POSITION AND IN THE ABSENCE OF ANY DECISION TO THE CONTRARY BROUGHT OUT BY THE REV ENUE, WE CONCLUDE BY HOLDING THAT SECTION 50C OF THE ACT DOE S NOT COME INTO OPERATION IN THE PRESENT FACTS WHERE WHAT IS TRANSF ERRED BY THE ASSESSEE IS ONLY THE LEASEHOLD RIGHTS IN LAND WHICH WERE ACQUIRED BY IT FROM MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPO RATION (I.E. MIDC) ON A 99 YEAR LEASE BASIS. AS A CONSEQUENCE, W E SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO COMPUTE THE LONG TERM CAPITAL GAIN ON TRANSFER OF LEASEHOLD LAN D BY ADOPTING THE FULL VALUE OF CONSIDERATION OF RS.2,345,04,000/- DE CLARED BY THE ASSESSEE IN THE COMPUTATION OF INCOME AND ALLOW THE APPROPRIATE RELIEF TO THE ASSESSEE. THUS, ON THIS GROUND ASSESS EE SUCCEEDS. 5.3.10 IN VIEW OF THE FACTUAL AND LEGAL MATRIX OF T HE CASE AS DISCUSSED ABOVE FROM PARAS 5.1 TO 5.3.9 OF THIS ORD ER (SUPRA) WE DO NOT FIND ANY JUSTIFICATION IN THE ORDERS OF THE AUT HORITIES BELOW IN SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 14 INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT A ND ADOPTING THE VALUE OF PROPERTY AS DETERMINED BY THE STAMP VALUAT ION AUTHORITY, FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN ON TR ANSFER OF THE ASSESSEES LEASEHOLD RIGHTS IN THE SAID FORESHORE L AND AT NAPEAN SEA ROAD, MUMBAI. IN THIS VIEW OF THE MATTER AND FO LLOWING THE AFORESAID DECISIONS OF THE VARIOUS ITAT BENCHES CIT ED AT PARAS 5.3.5 TO 5.3.9 OF THIS ORDER, WE DIRECT THE AO TO C OMPUTE THE CAPITAL GAINS ON THE TRANSFER OF THE LEASEHOLD RIGHTS OF TH E AFORESAID FORESHORE LAND AT NAPEAN SEA ROAD, MUMBAI BY ADOPTI NG THE VALUE OF THE PROPERTY AT RS. 1,35,00,000/- AS OFFERED BY THE ASSESSEE. IT IS ACCORDINGLY ORDERED. CONSEQUENTLY THE GROUNDS AT S. NOS. 1 & 3 AND THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE A RE ALLOWED. 2.2. IN THE AFORESAID ORDER, WHILE COMING TO A PAR TICULAR CONCLUSION, THE BENCH HAS ANALYZED/FOLLOWED CASES O F THE CO- ORDINATE BENCH LIKE NADIR NAZARALI DHANANI (ITA NO.100/MUM/2013) DATED 09/10/2015, KUMARPAL MOHANLA L JAIN (ITA NO.7231/MUM/2010) ORDER DATED 30/11/2015, ATUL G. PURANIK VS INCOME TAX OFFICER 132 ITD 499, HARIO M GUPTA 45 ITR (TRIB.) 137 (LUCK.) AND THEN REACHED TO A CO NCLUSION. SECTION 50C OF THE ACT PROVIDES THAT IF THE CONSIDE RATION RECEIVED OR ACCRUING IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY OF T HE STATE GOVERNMENT FOR SUCH TRANSFER THEN THE VALUE SO ADOP TED OR ASSESSED OR ASSESSABLE SHALL BE DEEMED TO BE THE FU LL VALUE OF CONSIDERATION AND THE CAPITAL GAINS WILL BE COMPUTE D ACCORDINGLY. THE MOOT QUESTION BEFORE US IS AS TO W HETHER SUCH EXPRESSION WOULD COVER THE TRANSFER OF A CAPIT AL ASSET BEING LEASE HOLD RIGHTS IN LAND OR BUILDING. THE C O-ORDINATE BENCH IN THE AFORESAID ORDER DATED 16/03/2016 HAS M ADE AN ELABORATE DISCUSSION AND CONCLUDED THAT SECTION 50C OF THE SHRI MEGHJI PARBAT PATEL ITA NOS.6390/MUM/2014 15 ACT DOES NOT COME INTO OPERATION, WHERE WHAT IS TRA NSFERRED BY THE ASSESSEE IS ONLY THE LEASE HOLD RIGHTS IN THE L AND, WHICH WAS ACQUIRED BY CIDCO ON A LEASE BASIS. THUS, FOLLO WING THE AFORESAID ORDER OF THE TRIBUNAL, WE AFFIRM THE STAN D OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESULTING INTO DISMISSAL OF APPEAL OF THE REVENUE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 26/10/2016. SD/- SD/- ( N. K. PRADHAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; * DATED :26/10/2016 F{X~{T? P.S/. . . !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /-. / THE RESPONDENT. 3. 0 0 & 1% ( +, ) / THE CIT, MUMBAI. 4. 0 0 & 1% / CIT(A)- , MUMBAI 5. 3'4% , 0 +,)+ 5 , & / DR, ITAT, MUMBAI 6. 6#7 / GUARD FILE. ! / BY ORDER, /3,%% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI,