Delhi High Court - Orders
Principal Commissioner Of Income Tax ... vs Noida Cyber Park Pvt Ltd on 21 May, 2024
Author: Yashwant Varma
Bench: Yashwant Varma
$~12
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 307/2023
PRINCIPAL COMMISSIONER OF
INCOME TAX DELHI 4 ..... Appellant
Through: Mr. Abhishek Maratha, SSC
with Mr. Parth Semiwal, Mr.
Apoorv Agarwal, JSCs, Ms.
Nupur Sharma, Mr. Manav
Goyal, Mr. Gaurav Singh, Ms.
Divya Verma & Mr.
Bhanukaran Singh Jodha, Advs.
versus
NOIDA CYBER PARK PVT LTD ..... Respondent
Through: Mr. Gaurav Jain & Ms. Shubha
Gupta, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MS. JUSTICE TARA VITASTA GANJU
ORDER
% 21.05.2024 CM APPL. 28779/2023 (250 Days Delay in Re-filing)
1. Bearing in mind the disclosures made, the delay of 250 days in re-filing the appeal is condoned.
2. Application stands disposed of.
ITA 307/20233. Notice. Since the respondent is duly represented, no further steps need be taken.
4. We take note of the following conclusions which have come to be rendered by the Income Tax Appellate Tribunal ["ITAT"] while dealing with the issue which stands raised:
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/05/2024 at 20:31:12 "9. We have carefully considered the rival submissions. As our discussion in the earlier paragraphs show, the sum and substance of the preliminary controversy revolves around the applicability or otherwise of section 50C of the Act to the facts and circumstances of the instant case. Shorn of other details, Section 50C(1) of the Act, in so far as it is relevant for our purpose, prescribes, that where the sale consideration received or accruing as a result of the transfer by an assessee of a capital asset, being "land or building or both", is less than value adopted by the Stamp Valuation Authority for the purposes of payment of stamp duty, then the value so adopted by the Stamp Valuation Authority be deemed to be the full value of the consideration received or accruing as a result of the transfer for the purposes of computing Capital Gains in the hands of the seller u/s 48 of the Act. Before us, the case sought to be made out by the assessee is that Section 50C, being a deeming provision, has to be strictly interpreted, a proposition which is quite acceptable; and, according to the assessee, Section 50C(1) covers a capital asset being "land or building or both" whereas in the instant case, what is transacted is merely leasehold rights in land and building, which is a distinct 'Capital Asset'. The distinction sought to be made by the assessee is well-founded, and such distinction can be gauged from the Act itself. In this context, we may refer to section 54D(1) of the Act, whose relevant portion reads as under.-
"Subject to the provisions of sub-section (2), where the capital gain arises from the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or any right in land or building, forming part of an industrial undertaking....
[underlined for emphasis by us]
10. Ostensibly, in Section 54D(l) of the Act, the 'capital asset' has been understood to be 'land or building or any right in land or building', thereby supporting the distinction sought to be canvassed before us. On the contrary, the phraseology in section 50C(l) of the Act only covers 'land or building or both' and does not refer to "any right in land or building".
11. Thus, the expression 'land or building' in its coverage is quite distinct from the expression 'any right in land or building'. The legislature, in its wisdom, has used the expression 'land or building or both' in Section 50C(1) of the Act, and not the expression 'any right in land or building'. Therefore, the express use of one expression would exclude the other, a legal premise which is supported by the judgment of Hon'ble Supreme Court in the case of GVK Industries Ltd. Vs. ITO - (2011) 4 SCC 36 (SC). In this view of the matter, in our considered opinion, the point sought to be raised by the assessee deserves to be upheld. Such a distinction also This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/05/2024 at 20:31:12 has found approval of the Hon'ble Bombay High Court in the case of C.I.T. vs Greenfield Hotels & Estates Pvt. Ltd. (supra) and other Tribunal decisions which have been referred to in the earlier part of this order. Apart from that, we find that a recent decision of our Coordinate Bench in the case of of Manish Traders vs ITO in ITA No. 4481/D/2016 dated 22.7.2019 (reported in 2019 (7) TMI.1268 ITAT Delhi has observed that assessee's leasehold right for a period of 90 years in question is a capital asset to which provisions contained u/s 50C are not applicable."
5. In our considered opinion and prima facie the view as expressed is wholly untenable bearing in mind the undisputed fact that the lease was granted for a period of 90 years and thus constituted a perpetual lease. We find ourselves unable to appreciate how the same would not fall within the expression "land or building or both" as appearing in Section 50C(1) of the Income Tax Act, 1961 ["Act"].
6. We, accordingly, admit the instant appeal on the following question of law:
(i) Whether in the facts and circumstances of present case, The ITAT was correct in deleting the addition of INR 2,40,77,29,683/- made under Section 50C of the Act being difference between stamp value of the properties and sale consideration of the property?
7. Let the matter be called again on 25.09.2024.
YASHWANT VARMA, J TARA VITASTA GANJU, J MAY 21, 2024/kk This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/05/2024 at 20:31:12