The Finance Insider blog

Search This Blog

Blog Archive

The Finance Insider

Wednesday, February 29, 2012

Sec 50C not applicable to transfer of 'tenancy rights'

Sec 50C applicable only to transfer of capital asset being land or building or both; Sec 50C cannot be invoked where tenancy rights or leasehold rights in land or building are transferred; Consideration received for transfer of ‘tenancy rights’ cannot be treated as consideration for ‘ownership rights’ only because payment was made at the time of sale of property by owner   : Kolkata ITAT

The decision was pronounced by ITAT bench of Shri Pramod Kumar and Shri Mahavir Singh.

A Mumbai bench of ITAT, in the case of Atul Puranik [TS-197-ITAT-2011(Mum)], has held that Sec 50C is not applicable to the transfer of ‘lease rights’ in land. ITAT observed that Sec 50C, being a deeming provision, would be applicable only for transfer of land and building and not in respect of any ‘lease rights’ in land or building. As per sec 50C, while computing capital gains, a higher stamp duty value can be substituted for actual ‘sales price’ in case of transfer of land or building.

Tejinder Singh [TS-121-ITAT-2012(Kol)]

No comments:

Post a Comment