Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 1804 - AT - Income TaxCapital gain computation - sale of lease rights - Applicability of section 50C - assessee submitted that property in question which was sold was a leasehold property and assessee was not the absolute owner of the said property - HELD THAT:- As decided in CIT vs. Green Hotels and Estates Pvt. Ltd. & Ors. [2016 (12) TMI 353 - BOMBAY HIGH COURT] and Farid Gul Mohammad vs. ITO [2016 (4) TMI 1053 - ITAT MUMBAI] provisions of section 50C of the Act are not applicable to the transfer of leasehold rights considering the decision relied by the Ld. CIT(A) in the case of Shavo Norgarven Pvt. Ltd. vs. DCIT Circle-3(3) [2013 (1) TMI 372 - ITAT MUMBAI]. We, therefore, respectfully following the Hon’ble Bombay High Court decision and coordinate bench decision on the issue hold that provisions of section 50C of the Act are not applicable to the transfer of leasehold rights and accordingly set aside the order of Ld. CIT(A) on this issue. Not applying the land rate as per MIDC and instead working out the market value of land by some arbitrary proportionate method - A.R. suggested that the more objective and scientific method should be applied to determine the value of the land and building - HELD THAT:- In our opinion it would be fair and proper if the value assigned to the building is taken at ₹ 1,15,58,000/- the book value of the building and the balance of ₹ 4,09,42,000/- is attributed to the land which is even lower to valuation as per MIDC rate. Accordingly, we direct the AO to take the sale consideration for land at ₹ 4,09,42,000/- for the land and ₹ 1,15,58,000/- for the building as there is no objective and fair basis for allocation of the sale consideration other than this. Accordingly, the ground of the assessee is allowed. Disallowance of written off project expenses - According to Ld. CIT(A) the said expenditure was capitalized in 2009-10 and in connection with the project for 180 KVA which has been kept on hold by the customer and thus there is no reason to claim the said expenditure and thus dismissed the appeal of the assessee - HELD THAT:- We are fully convinced with the contentions of the Ld. A.R. that the expenses on the above said orders for preparation of projects and feasibility etc which are admissible business expenses to be written off against the revenue of the assessee. We are not in agreement with the conclusion drawn by the Ld. CIT(A) and accordingly hold that the expenses claimed by the assessee by way of writing the project expenses a part of project expenses are allowed.Accordingly, we set aside the order of authorities below and direct the AO to allow ₹ 3,02,000/-. - Appeal of the assessee is allowed.
|