August 2023
Capital gains — Computation of capital gains — Effect of section 50C — Stamp value deemed to be full value of consideration for transfer of immovable property — Object of provision to prevent unaccounted cash transfers of capital assets — Not applicable in case of compulsory acquisition of land and buildings.
29. Principal CIT vs. Durgapur Projects Ltd
[2023] 454 ITR 367 (Cal)
A. Y. 2015-16
Date of order: 24th February, 2023
Section 50C of ITA 1961
Capital gains — Computation of capital gains — Effect of section 50C — Stamp value deemed to be full value of consideration for transfer of immovable property — Object of provision to prevent unaccounted cash transfers of capital assets — Not applicable in case of compulsory acquisition of land and buildings.
In the A. Y. 2015-16, the assessee had earned capital gain on transfer of land to the National Highways Authority of India on compulsory acquisition. The AO applied section 50C of the Income-tax Act, 1961 and added a sum of
Rs. 5,48,43,584 to the total income.
The CIT(A) and the Tribunal held that section 50C was not applicable and deleted the addition.
On appeal by the Revenue, the Calcutta High Court upheld the decision of the Tribunal and held as under:
“i) Section 50C of the Income-tax Act, 1961, was inserted by the Finance Act, 2002 with effect from April 1, 2003 for the purpose of taking the value adopted or assessed by the stamp valuation authority as the deemed full value of consideration received or accruing as a result of transfer of a capital asset being land or building or both, in case the consideration received or accruing as a result of transfer is less than such value. The object and purpose behind ins
