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2014 (2) TMI 1028 - AT - Income TaxApplicability of Section 50C of the Act - Whether the provisions of section 50C of the Act are applicable or not to the sale of development rights – Held that:- The decision in The decision in ITO Versus SHRI CHANDULAL P PATEL [2013 (12) TMI 946 - ITAT MUMBAI] followed - during the course of assessment proceedings for earlier year i.e. assessment year 2006-07, the AO, himself observed that the assessee was in the business of construction and development rights purchased by the assessee is part of stock in trade - the property was affected with innumerable court proceedings and the assessee could not get possession of the said property till the date the assessee transferred his rights in the property -the assessee was never in possession of the said property. The assessee has not claimed any benefit of indexation in the cost of acquisition - the assessee has treated the said property as stock in trade - There is no dispute to the fact that if a property is in the nature of stock in trade, the provisions of section 50C are not applicable as it applies only in respect of capital assets being land or building or both - On perusal of above section 50C, shows that the provisions are applicable only in respect of capital asset, being land or building or both and there is no reference that the said provisions is applicable to stock in trade - There is no infirmity in the order of the CIT(A) to hold that the provisions of section 50C are not applicable to the property under consideration - The department has also not brought any material on record that the sale value as per agreement for sale of development rights under the facts and circumstances of the case is not genuine – thus, the order of the CIT(A) upheld – Decided against Revenue.
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