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2014 (11) TMI 395 - AT - Income TaxCapital gain on sale of property in the hands of charitable society – Application of provisions of section 50C – Held that:- The assessee is a charitable society and is registered u/s 12A of the Act – CIT(A) was rightly of the view that section 11(1A) of the Act which lays down a complete system of taxability of capital gains in respect of an institution approved by the CIT u/s 12A of the Act is a complete code - The provisions of section 50C create a limited fiction to the effect that the full Value of consideration shall be substituted in the provisions of section 48 by the amount taken by the sub-registrar for registration purposes - the fiction contained in section 50C could be applied only for the purpose of computation of capital gains u/s 48 and not beyond the provision – it cannot be applied for the purpose of calculating the gain u/s 11(1A) - what is relevant for the purpose of section 11(1A) is the reinvestment of the net amount actually realized and not any notional amount as may be adopted by virtue of sec. 50C. Heads of income u/s 14 have no relevance and question of allowing statutory deductions will not arise - The 'income' contemplated by the provisions of section 11 is the real income and not the income as assessed or assessable in view of the above judgments - Assessment of Trusts is a separate code in itself once an institution has been granted registration u/s 12A - the 'income' occurring in the Act for the purpose of a Trust should be considered what is available in the hands of the assessee i.e. TRUST subject to an adjustment of any expenses extraneous to the trust - Section 11(1A) in itself is a separate specific section which governs the overall taxability of capital gains in a trust and being a specific section it shall prevail over section 50C which is a general section and does not start with a non-obstante clause - In the case of a Trust and for the purpose of Sec. 54F where question of utilization of the funds in case of sale of an asset arises it would be the available funds with the assessee and not the deemed income - This is on the ground that what is, not available with the assessee can never be invested - assessee has rightly computed income of the year and Sec. 50C of the Act has no application to the facts of the case – thus, the order of the CIT(A) is upheld – Decided against revenue.
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