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2022 (7) TMI 333 - AT - Income TaxCapital gain in respect of sale of only one property - addition u/s 50C - transfer of leasehold rights in a plot/land - assessee has acquired the impugned property on lease from Kanpur Development Authority vide lease deed for a period of 99 years - As per AO assessee has failed to prove that the sale of the impugned property and capital gains thereon had been declared in the return of income - CIT(Appeals) dismissed the appeal of the assessee by holding that what the assessee was sold was not a leasehold property, but the ownership rights in the property had been transferred under the impugned sale deed and therefore tenancy right of the buyer had been converted into ownership rights by the sale deed under consideration, where the assessee was shown to the landlord property - HELD THAT:- What the assessee has transferred are leasehold rights in the property which vested in him, to the tenant of the property. The same is evident from the terms of “Agreement of Ownership” In view of the consistent position taken by various Courts/Tribunals on this issue, we hold that Ld. CIT(Appeals) erred in facts and law in holding that what the assessee transferred were ownership rights in the property in question and therefore provisions of section 50C of the Act applied to transfer of rights in the impugned property. What we note is that the assessee itself had leasehold rights in the said property and hence in instant facts, the assessee cannot transfer/confer ownership rights in the said property in favour of the tenant. Further, the assessee has also produced before us a list of 50 properties in respect of which leasehold rights were transferred by the assessee in the same premises i.e. Sitaram building. The Department has only questioned the transfer value in respect of one single property while accepting the sale/transfer value respect of all the other properties. Therefore, considering the above facts and the consistent position taken by various Courts/Tribunals on the issue of applicability of section 50C of the Act on transfer of leasehold rights in the property, we allow the appeal of the assessee.
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