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2020 (12) TMI 101 - AT - Income TaxCapital gain on transfer of development rights (TDR) - Application of section 50C in the case of developmental rights - HELD THAT:- The term 'capital asset' mentioned in the section specifically refers and confines its meaning to 'land or building or both'. Thus, scope of section 50Ci s restricted by the legislature itself to these two types of capital assets only. In the present case before us, the capital asset transferred by the assessee was 'Development Rights in the land' and not the 'Land' itself. If we go through similar provisions of the Act, we find that the legislature has used this expression consciously and carefully and keeping in view its need and objective of legislating section 50C. We should apply the 'Rule of strict Interpretation' as well as 'Rule of Literal Construction' while understanding the meaning and scope of deeming provisions - under the given facts and circumstances, Ld. Counsel has rightly contended that since the impugned capital asset transferred by the assessee upon which long term capital gain has been computed by the AO is on account of transfer of Development Rights in the land of the assessee. The land itself has not been transferred by the assessee. Thus, in our opinion provisions of section 50C have been wrongly applied upon the impugned transaction. Thus, we reverse the action of lower authorities in applying the provisions of section 50C and in substituting any value other than the amount of actual sales consideration received by the assessee. It is also noted by us that for the assessment year under consideration there is no other provisions on the statute which permit the AO to substitute any other value with the full amount of consideration actually received by the assessee, while computing income under the head of capital gains - Ground of the assessee is allowed.
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