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2009 (11) TMI 905 - AT - Income TaxLong term capital gains on transfer of tenancy right - Addition u/s 50C OR 48 - difference of 9.43% between document price and market value - HELD THAT:- From the perusal of Notes on clauses and Memorandum explaining the provisions in the Finance Bill, 2002, it becomes explicitly clear that if the consideration declared to be received on sale of land or building or both is less than the value adopted or assessed by any authority of the State Government for the purposes of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of consideration and capital gain shall be computed accordingly u/s 48. As noticed from plain reading of the section 50C that unless the property transferred has been covered by that section 50C, that is a capital asset, being land or building or both registered by sale deed and for that purpose the value has been assessed and stamp duty has been paid by the parties, only then section 50C cannot come into operation. In the case under consideration there is transfer of tenancy right though that is capital asset but not a capital asset, being land or building or both. Therefore, section 50C is not applicable to the facts of the case under consideration. Accordingly, the AO is not correct in taking the value adopted or assessed by the authority of a State Government/ the ‘stamp valuation for the purpose calculation of capital gains on transfer of tenancy right. The orders of AO and CIT (A) are set aside and the claim of the assessee is allowed.
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