Recently, the Bombay HC dismisses Assessee’s appeal observing that provisions of Section 50C would be applicable on transfer of land by MIDC in favour of Assessee, rights to which were transferred by lessee by way of Deed Assignment to the Assessee.

Further, HC renders that word ‘transfer’ used in Section 50C cannot be used in a restricted manner and has to be given widest amplitude to include all modes of transfer. Consequent to examining the provisions of Section 50C, HC outlines expression ‘consideration received or accrued as a result of transfer of a capital asset, being land or building or both’ as used in the said section. HC articulates that it has to be consonance with the definition of ‘capital asset’ as drawn in Section 2(14). Further, emphasizes that perusal of definition of ‘capital asset’ drawn in Section 2(14) includes property of any kind, “held by the Assessee”, and does not refer to the expression “owned by the Assessee”. HC opines that immoveable property, i.e. land or building can be held in numerous ways, such as holding can either be as an owner, lessee, sub-lessee, allottee, etc. or any other mode recognized by law. HC asserts that the expression “held by the Assessee” does not restricts the manner in which the land or building is held, and that the holding of land is merely a method in which rights to the land, can be held or acquired by the person, and therefore cannot be equated in any manner with land or building, but rather would be a species of right to hold it.

Further, HC states that merely because the land that was originally allotted by MIDC by way of a lease to the predecessor of the Assessee, who in turn received the same by way of assignment, that being one of the modes of transfer, of land or building, the mere use of a particular mode of transfer, cannot create an expression vis-à-vis holding of the land or building by the Assessee.

HC observes that the word ‘transfer’ as used in Section 50C(1) cannot be used in a restricted manner and has to be given widest amplitude, considering the nature and purpose of the Section, and would thus include all modes and methods of transfer as are permissible and recognizable in law. HC rejects Assessee's reliance on the coordinate bench decision in Atul G. Puranik as it does not consider the effect and import of Section 2(14)(a) in conjunction with Section 50C and merely goes on to hold, that since the land is held in a leasehold right, it cannot be equated with land or building and does not address the issue at all in light of the language of the statutory provision, therefore cannot be considered as a good law; Further rejects reliance on jurisdictional HC decision in Greenfield Hotels and Estates; HC, thus sees no reason to entertain the appeal.:HC BOM

Decision Summary

The judgment was delivered by the Division Bench of the Bombay HC comprising Justice Avinash G. Gharote and Justice Abhay J. Mantri.

Advocate R.R. Dawda appeared for the Assessee while the Revenue was represented by Advocate Bhushan N. Mohata.

Case Law Information
Case Name :
Case Name
Vidarbha Veneere Industries Ltd Vs Income Tax Officer
Taxpayer Name :
Vidarbha Veneere Industries Ltd
Judicial Level & Location :
High Court Bombay
Appeal Number :
INCOME TAX APPEAL NO. 34 OF 2022
Date of Ruling :
2025-04-01
Ruling in favour of :
Revenue
Section Reference Number :
2(14)
50C

Nature of Issue :
Valuation
Judges :
Justice Avinash G. Gharote
Justice Abhay J. Mantri
Counsel for Tax Payer:
R.R.Dawda
Counsel for Department :
Bhushan N. Mohata
We trust you find the same useful.

Bombay HC Sec. 50C applies to assigned leasehold property transfers, wide scope of word 'transfer' us 50C.pdf