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2017 (5) TMI 781 - AT - Income TaxRevision u/s 263 - AO has not correctly applied the provisions of Section 50C accordingly his order was erroneous as well as prejudicial to the interest of the Revenue - Held that:- From the record, we found that the assessee company has sold the property and shown sale consideration at ₹ 30 lakh whereas the stamp duty value of the property ₹ 1,42,83,000/- and accordingly the Assessee arrived at loss of ₹ 44,87,519/- on sale of the residential property. While passing the order u/s.143(3), the AO has not uttered a single word with regard to applicability of provisions of Section 50C in respect of building sold by assessee to its Managing Director. The provisions of the Section 50C are applicable in the case of transfer of land and building including depreciable capital asset. In the instant case, the property has been transferred to Mrs. Alka B Birewar, the Managing director of the assessee company for ₹ 30 lakhs against the stamp duty valuation of the property of ₹ 1,42,83,000/ -. The Hon'ble Bombay High court in the case of Bhatia Nagar Premises Co-Operative society Ltd. [2010 (3) TMI 813 - Bombay High Court] had an occasion to consider the scope of on 50 C and it is held by their Lordships that Section 50C is a measure provided to bridge the gap as it was found that the assessee were not correctly declaring the full value of consideration or in other words resorting to the practice of under valuation. We can safely conclude that not applying the provisions of Section 50C to the facts of the instant case has rendered the order of the AO not only erroneous but also prejudicial to the interest of Revenue, accordingly, CIT has correctly invoked the provisions of Section 263. It is pertinent to mention here that nowhere CIT has disturbed the order of the AO with regard to exemption allowed u/s 54 EC of the IT Act. Accordingly, the argument of learned AR is of no relevance in so far as the assessee will continue to enjoy the exemption u/s.54EC of the IT Act. - Decided against assessee.
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