INCOME TAX ACT, 1961

Section 50C

Capital gains - Applicability of section 50C - Addition of word 'assessable' in section 50C - Whether have retrospective effect

Assessee was engaged in the business of manufacturing medical consumable. AO observed that income got escaped assessment to tax based on the information that assessee had not offered to tax capital gains, arising on sale of land. Accordingly, AO issued notice under section 148 and in response to the same, assessee had filed revised return of income. AO adopted guideline value prescribed for registration of document as deemed consideration under section 50C rejecting the argument of assessee that provisions of section 50C have no application. Held: CBDT Circular No.5/2010 clearly explained that the provisions of section 50C will come into effect and it was further clarified that provisions of section 50C have no application in respect of transaction which are not registered with the registration authorities. After introduction of the words “or assessable” after the words “adopted or assessed”, such transfers where value assessable by the stamp valuation authority were also brought into ambit of section 50C. Thus, such introduction of new set of class of transfer would certainly have the prospective application only and not otherwise. Hence, assessee's transfer admittedly made earlier to such amendment could not be brought under section 50C.

REFERRED : State of Tamil Nadu & Anr. v. India Cements Ltd. & Anr. (2011) 40 VST 225 (SC) Paper Products Ltd. v. CCE (2001) 247 ITR 128 (SC) : (1999) 7 SCC 84) : 2001 TaxPub(DT) 0203 (SC) CIT v. R. Sugantha Ravindran (2013) 352 ITR 488 (Mad) : 2013 TaxPub(DT) 1286 (Mad-HC)

FAVOUR : In assessee's favour

A.Y. :

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