TMI Blog2009 (11) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... ome into operation. In the case under consideration there is transfer of tenancy right though that is capital asset but not a capital asset, being land or building or both. Therefore, section 50C is not applicable to the facts of the case under consideration. Accordingly, the AO is not correct in taking the value adopted or assessed by the authority of a State Government/ the stamp valuation for the purpose calculation of capital gains on transfer of tenancy right. The orders of AO and CIT (A) are set aside and the claim of the assessee is allowed. - A. L. Gehlot (Accountant Member) For the Petitioner : L. K. Doshi For the Respondent : S. K. Madhukar ORDER This appeal filed by the assessee is directed against the order of CIT(A)- XVIII, Mumbai, passed on 05.02.2008 for the assessment year 2005-06 wherein the assessee has raised the following grounds of appeal:- 1. In the facts, circumstances of the case in law, learned AO erred in assessing the long term capital gains on transfer of tenancy right at ₹ 2,07,466/-. The learned CIT(A) also erred in confirming the action of AO. 2. In invoking the provisions of section 50C for ascerta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43% of the market value. It was submitted that the said property was given on tenancy basis for last number of years which was transferred by the existing two tenants to the new tenant with the assessee s consent. Out of total consideration of ₹ 30 lakhs for transfer of tenancy rights, the old two tenants i.e. outgoing tenants have retained their shares of ₹ 10 lakhs and balance amount i.e. ₹ 20 lakhs has been received by the assessee by account payee cheque. The entire amount of consideration of ₹ 20 lakh received by the assessee has been invested in NABARD Bonds u/s 50EC of the Act. It was submitted by the assessee that it was alternate submission of the assessee that if at all any amount is to be considered in working out the capital gains by applying the provisions of section 50C, it will be 2/3rd of ₹ 3,11,200/- i.e. ₹ 2,07,447/- not the entire amount of difference ₹ 3,11,200/- taxable in assessee s hand. This alternate submission of the assessee is without prejudice to the submission i.e. section 50C is not applicable to the case under consideration. The AO noted that the assessee has agreed that an additional amount is to be consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 50C in the Income-tax Act to make a special provision for determining the full value of consideration in cases of transfer of immovable property. It is proposed to provide that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration, and capital gains shall be computed accordingly under section 48 of the Income-tax Act. It is further proposed to provide that where the assessee claims that the value adopted or assessed for stamp duty purposes exceeds the fair market value of the property as on the date of transfer and he has not disputed the value so adopted or assessed in any appeal or revision or reference before any authority or court the Assessing Officer may refer the valuation of the relevant asset to a Valuation Officer in accordance with section 55A of the Income-tax Act. If the fair market value determined by the Valuation Officer is less than the value adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion confined to restricted operation can be widened to include within its sweep all the cases where such property is not covered. The Hon ble Supreme Court in the case of CIT v. Amar Chand Shroff [1963] 48 ITR 59 has held that legal fiction is only for a definite purpose and they are limited to the purpose for which they are created and should not be extended beyond the legitimate field . Similar view has been reiterated by the Hon ble Supreme Court in the case of CIT v. Mother India Refrigeration Industries (P.) Ltd. [1985] 155 ITR 7111. Hon ble Supreme Court in the case of Orisa State warehousing Corporation/ Rajasthan State warehousing Corporation 237 ITR 589 (SC) observed as under:- Page No 604 Let us, however, at this juncture, consider some of the oft cited decisions pertaining to the interpretation of the fiscal statutes being the focal point of consideration in these appeals. Lord Halsbury as early as 1901, in Cooke v. Charles A. Vogeler Company [1901] AC 102 (HL) stated the law in the manner following: a court of law has nothing to do with the reasonableness or unreasonableness of a provision of a statute except so far as it may hold it in interpreting wha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general tendency to 'give the taxpayer the breaks', are out of place where the legislation has a fiscal mission. Be it noted that individual cases of hardship and injustice do not and cannot have any bearing for rejecting the natural construction by attributing normal meanings to the words used since hard cases do not make bad laws . In fine thus, a fiscal statute shall have to be interpreted on the basis of the language used therein and not de hors the same. No words ought to be added and only the language used ought to be considered so as to ascertain the proper meaning and intent of the legislation. The court is to ascribe the natural and ordinary meaning to the words used by the Legislature and the court ought not, under any circumstances, to substitute its own impression and ideas in place of the legislative intent as is available from a plain reading of the statutory provisions . 3.5 From above discussions I noticed from plain reading of the section 50C that unless the property transferred has been covered by that section 50C, that is a capital asset, being land or building or both registered by sale deed and for that purpose the value has been ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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