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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH
Avinash G. Gharote, Abhay J. Mantri
Vidarbha Veneere Industries Ltd. – Appellant
Versus
Income Tax Officer, Ward-7(1), Civil Lines – Respondent
JUDGMENT :
Avinash G. Gharote, J.
Heard.
2. Rule. Rule returnable forthwith. The petition is heard finally with the consent of the learned counsel for the parties.
3. The appeal questions the order dated 24/03/2017 (Pg.72), passed by the learned Tribunal in MA No.07/Nag/2016, whereby the claim of the appellant of non-applicability of Section 50C of the Income Tax Act, 1961 (for short “IT Act”) to a property held in leasehold right has been negated by dismissing the appeal.
4. Mr. Dawda, learned counsel for the appellant, by relying upon the language of Section 50C read with the definition of ‘Capital Asset’ as defined in Section 2(14) of the IT Act submits, that since the lands in question which are Plot Nos.G-17, 18, 6 and 7, situated in the MIDC, Nagpur, were transferred by the MIDC, in favour of M/s. Vidarbha Veneeer Industries Ltd. by way of a lease dated 31/03/1979, rights under which have been assigned by the lessee, by way of a Deed of Assignment dated 30/08/2004 in favour of the present appellant (Pg.118), the same would not attract Section 50C of the IT Act and therefore, the income tax would not be payable on the sale consideration. In support of his contention learned counsel
The court held that leasehold rights are considered capital assets under Section 50C of the Income Tax Act, affirming that the manner of holding property does not exempt it from tax obligations.
Section 50C applies to permanent leasehold rights in land/building as capital assets held by assessee; curative proviso allowing stamp value on agreement date (if payments via banking channel) applie....
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