S. 50C is a deeming provision which does not apply to “rights in land & building”

ITO vs. Yasin Moosa Godil (ITAT Ahmedabad)

The assessee booked a flat in a building which was under construction for which he had paid Rs. 16.12 lakhs. The builder had not handed over possession of the flat to the assessee nor had he executed any registered sale deed in favour of the assessee. The assessee entered into an agreement pursuant to which he transferred his rights, title and interest in the said flat in consideration of the amount paid by him to the builder. The AO took the view that as the flat was valued at Rs. 57.57 lakhs for stamp duty purposes, capital gains had to be computed on that basis u/s 50C. This was reversed by the CIT (A). On appeal by the department, HELD dismissing the appeal: