Shri Farid Gulmohamed v. ITO

INCOME TAX ACT, 1961

--Capital gains--Applicability of section 50CAsset transferred was leasehold right in property--Assessee had a leasehold property which he sold for certain consideration and declared long-term capital gain. Stamp duty value of such property was higher than actual sale consideration. AO had taken stamp duty value as full value of consideration by invoking section 50C and computed capital gain accordingly. Assessee took the plea that section 50C could be invoked where land or building or both were transferred. He only transferred leasehold right in property which did not come in the ambit of section 50C. Held: Meaning of expression 'immovable property' contained in section 269UA(d) can be inferred is that even leasehold rights in land is a capital asset. However, the said inference does not justify the inclusion of a transaction involving transfer of leasehold rights in land within the purview of section 50C of the Act. Quite clearly, section 50C of the Act applies only to capital asset being land or building or both. It does not apply to leasehold rights in the land or building. Therefore, section 50C could not be invoked.