Calculation of Capital Gain by invoking the provisions of Section 50C of the Income Tax Act

Last updated: 23 November 2021

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This Income Tax Appellate Tribunal ruling addresses the calculation of capital gains tax under Section 50C. The assessee company declared long-term capital gains from the sale of leasehold land. The Assessing Officer reviewed the consideration received for the land transfer. Ultimately, the appeal by the Revenue was dismissed, upholding the assessee's calculation.

Court :
ITAT Pune

Brief :
This appeal by the Revenue is directed against the order passed by the CIT(A)-1, Aurangabad on 23-06-2017 in relation to the assessment year 2014-15.

Citation :
ITA No.2096/PUN/2017

IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH, ‘A’ PUNE
BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND
SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER

ITA No.2096/PUN/2017

Assessment Year : 2014-15

ACIT, Circle-1,
Aurangabad

M/s. Badve Engineering Ltd.,
P.No.D-39, MIDC, Waluj,
Aurangabad – 431 136
PAN : AAACB9378F

Assessee by Shri Nikhil S. Pathak
Revenue by Shri S.P. Walimbe
Date of hearing 21-10-2021
Date of pronouncement 21-10-2021

ORDER

This appeal by the Revenue is directed against the order passed by the CIT(A)-1, Aurangabad on 23-06-2017 in relation to the assessment year 2014-15.

2. Briefly stated, the facts of the case are that the assessee company is engaged in the business of manufacturing of automobile press components and wind mill generation. In the return filed for the year under consideration, the assessee declared long term capital gain of Rs.2,84,77,186/-. The Assessing Officer (AO) during the course of assessment proceedings observed that the assessee sold two leasehold lands situated at Plot No.C-5-2, Shendra MIDC, Dist.

3. Before transferring such leasehold right, the assessee was required to take permission from MIDC, which it obtained. Pursuant to such permission, the assessee executed Deed of Assignment under which the leasehold land along with building constructed thereon was transferred. While determining the amount of capital gain on the transfer of the land, the assessee separately took the amount of full value of consideration of land.

4. In the result, the appeal is dismissed.
Order pronounced in the Open Court on 21st October, 2021.

Please find attached the enclosed file for the full judgement.

FAQ :

The ruling concerns the calculation of capital gains tax for a company selling leasehold land, specifically in relation to Section 50C of the Income Tax Act.

The assessee company is involved in manufacturing automobile press components and wind mill generation.

The assessee declared a long-term capital gain of Rs. 2,84,77,186/- for the assessment year 2014-15.

The Assessing Officer reviewed the amount of capital gain calculated by the assessee on the transfer of the leasehold land.

The appeal filed by the Revenue against the order of the CIT(A) was dismissed.

Attached File : 1442821_4636_1634815593_ita_no_2096_of_2017_badve_engineering_ltd.pdf

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Poojitha Raam Vinay

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I simplify complex income tax, TDS, banking, and investment updates into practical insights for taxpayers, salaried professionals, pensioners, and senior citizens. I regularly write on ITR filing, tax compliance, savings schemes, and the latest financial rule changes in India.

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