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2015 (10) TMI 1746 - AT - Income TaxReopening of assessment - enhancement of taxable income - taxation income from transfer of assets - Held that:- The impugned order of the Commissioner of Income Tax (Appeals) needs to be set aside on the reason that the Commissioner of Income Tax (Appeals) considered the income under the head "income from business" and invoked the provision of section 50C to determine the sale consideration at E64 crores on the basis of guideline adopted for stamp valuation purposes by State Government. On analyzing the language used by the legislature in Sec. 50C, following prominent aspect can be seen that the said section specifically deals with the transfer of the ‘capital asset’ being land or building or both and it provides for replacing the value adopted or assessed for the purpose of stamp duty more particularly under sec. 48 in place of value or sale consideration shown by the assessee. It is to take note that the expression ‘capital asset’ has specific relevance with sec. 45 which provides for brining to tax on transfer of ‘capital asset’ as capital gain. It is abundantly clear from the explanation given in circular No.8 of 2002, dated 27th Aug, 2002 that the basic intention to insert sec. 50C is for the purpose of determining full value of sale consideration for the purpose of computation of capital gains under sec. 48. The issuing of notification or circular is good guide of contemporaneous exposition of the position of the law and this rule is popularly known as "contemporanea expositio". There should not be any cloud of doubt that sec. 50C has application only to the extent of determining sale consideration for computation of capital gain under Chapter IV-E of the Act and it cannot be applied for determining the income under other heads. Therefore, when admittedly in the present case the sale of the property is treated as the business income and not as a capital gain, the provision of Sec.50C is not applicable. Being so, considering the entire facts and circumstances of this case, we are of the opinion that the Commissioner of Income Tax (Appeals) is not justified in enhancing the assessment.
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