TMI Blog2019 (2) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Acquisition Officer way back in the year 1970/1972. It is noted that the lease hold rights were for 60 years. We find that before the authorities below no such submissions were made. Merely it was stated that the A.O. ought to have referred the valuation to the Valuation Officer. However, this being the legal issue the assessee has relied upon the decision of coordinate bench. We therefore, set aside this issue to the file of the Ld. CIT(A) for his decision. Ground Nos.1 to 2.6 are partly allowed for statistical purposes. Deduction u/s 43B in respect of interest actually paid to financial institution during the year - HELD THAT:- As perused the materials available on record and gone through the orders of the authorities below. CIT(A) has not rejected the claim on the ground of allowability. The same has been rejected on the basis of evidence being not produced. We find before the A.O. it was categorically stated that the assessee has paid interest to the M.P. Finance Corporation being a state entity. A.O. ought to have verified from the M.P. Finance Corporation. Under the facts disbelieving the assessee was not called for. Therefore, we direct the A.O. to delete this addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation of ₹ 4,18,00,000/- may very kindly be directed to be substituted by ₹ 2,25,00,000/- the actual amount received by the appellant. 2.6 Without prejudice to the above ground of appeal and only as an alternate plea the appellant states that the provisions of section 50C as applicable at the relevant point of time, even otherwise do not authorize the action of the AO or of the ld. CIT(A) substituting the value. 3. That the ld. CIT(A) erred in upholding the AO's action in not considering/entertaining the claim made by the appellant during the assessment proceedings of allowing deduction u/s 43B in respect of interest actually paid to financial institution during the year, which was suo motu disallowed in the earlier years due to non-payment. That on the facts and in the circumstances of the case the appellant is legally entitled to claim deduction u/s 43B in respect of such interest in this year, and it is prayed that the same may very kindly be allowed. 4. That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. He submitted that what is transferred are merely the lease hold rights pertaining to the capital assets. Ld. Counsel in this regard has relied upon the judgement of Hon'ble Mumbai High Court rendered in the case of CIT Vs. Green Hotels and Estates Pvt. Ltd. in ITA No.735 of 2014 reported in 389 ITR 0068 (Bom.). Ld. Counsel further relied on the decision of coordinate bench of the Tribunal in the case of Atul G. Puranik Vs. ITO reported in 11 ITR 0120. The reliance is also placed on the decision rendered by the coordinate bench of this Tribunal in the case of Kancast Pvt. Ltd. Vs. ITO (2015) 68 SOT 0110 (Pune). Ld. Counsel submitted that in the light of these decisions, the assessing officer ought not to have invoked the provisions of section 50C of the Act. 4. On the contrary, Ld. D.R. opposed both the submissions of the assessee and supported the orders of the authorities below. He submitted that the contention of the assessee that the transfer of the sale was a slump sale is contrary to the records. He submitted that the subsequent argument with the buyer would not entitle the assessee to claim the transactions as slump sale. He submitted that if the claim of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated by the assessee company that it sold cinema undertaking in the name and style of M/s. Manmandir cinema. We are unable to accept contention of the assessee that the subject matter of the transaction was the undertaking namely M/s. Manmandir but as per the sale deed, it was only land and building. Therefore, the case laws as relied by the Ld. Counsel for the assessee would be of no help to the assessee. The claim of the assessee that it was a slump sale has been rightly rejected by the authorities below. Now coming to another submission of the assessee that what is transfer is the lease hold rights. The revenue has not disputed the fact that the property in question was on the basis of lease hold rights. Even in the sale deeds, it has been described so. The Hon'ble Bombay High Court in the case of CIT Vs. Green Field Hotels and Estates Pvt. Ltd. (supra) considering the question of law urged by the revenue whether in the facts and in the circumstances of the case and in law the Tribunal was justified in upholding the order of the CIT(A) in deleting the addition of long term capital gain of ₹ 80,58,000/- on the ground that provisions of section 50C of the I.T. Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ires that where the full value of consideration shown to have been received or accruing on the transfer of an asset, being land or building of both, is less than the value adopted or assessed or assessable by stamp valuation authority, the value so adopted etc. shall, for the purposes of s. 48, be deemed to be full value of consideration received or accruing as a result of such transfer. This section has been inserted by the Finance Act, 2002 w.e.f. 1st April, 2003 with a view to substitute the declared full value of consideration in respect of land or building or both transferred by the assessee with the value adopted or assessed or assessable by stamp valuation authority, But for this provision, there is nothing in the Act, by which the full value of a consideration received or accruing as a result of transfer of land or building or both is deemed to be any amount other than that actually received. From the language of sub-s. (1), it is clear that the value of land or building or both adopted or assessed or assessable by the stamp valuation authority shall, for the purpose of s. 48, be deemed to be the full value of the consideration received or accruing as a result of such a tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins'. The AO formed the view that since the block of building ceased to exist on account of sale of flat during the year, the WDV of the flat was liable to be taken as cost of acquisition under s. 54E of the Act. He further held that since the assessee had availed depreciation on such asset, which was otherwise a long-term capital asset, the deeming provision under s. 50 would apply and it would be treated as capital gain on the sale of short-term capital asset and hence no benefit under s. 54E could be allowed. When the matter came up before the Hon'ble Bombay High Court, it was noticed that sub-ss. (1) and (2) of s. 50 contained a deeming provision and such fiction was restricted only to the mode of computation of capital gain contained in ss. 48 and 49 and hence it did not apply to other provisions. The assessee was held to be eligible for exemption under s. 54E in respect of capital gain arising out of the capital asset on which depreciation was allowed. 11.4 In view of the aforenoted judgments rendered by the Hon'ble apex Court and that of the Hon'ble jurisdictional High Court, it is clear that a deeming provision can be applied only in respect of the situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section cannot be extended to any asset other than those specifically provided therein. As s. 50C applies only to a capital asset, being land or building or both, it cannot be made applicable to lease rights in a land. As the assessee transferred lease rights for sixty years in the plot and not land itself, the provisions of s, 50C cannot be invoked. We, therefore, hold that the full value of consideration in the instant case be taken as ₹ 2.50 crores. 12. To sum up, we hold that capital gain on the transaction of assignment of lease rights in the plot is to be computed in the year in question by adopting the full value of consideration on 25th Aug., 2005 at ₹ 2.50 crores and the cost of acquisition shall be worked out afresh as per law by the AO by taking the market value of lease rights for sixty years in the plot as on 16th Aug., 2004. 13. In the result, the appeal is allowed for statistical purpose. 6. We find that before the authorities below no such submissions were made. Merely it was stated that the A.O. ought to have referred the valuation to the Valuation Officer. However, this being the legal issue the assessee has relied upon the decision of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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