Another Important judgment of Mumbai ITAT - S. 50C applies to immovable depreciable assets being land and building or both

0 comments Thursday, April 28, 2011

ITO vs United Marine Academy(Mumbai ITAT)

Brief Facts: The assessee sold an office building for Rs. 49.43 lakhs. As the WDV of the said building was also Rs. 49.43 lakhs, no STCG was offered to tax. The AO held that as the stamp duty valuation of the building was Rs. 76.49 lakhs, the consideration had to be taken at that figure u/s 50C. The AO also held that the entire block of assets had not ceased to exist. On appeal, the CIT (A) reversed the AO on the ground that the deeming provisions of s. 50 & s. 50C operate in distinct fields and s. 50C could not apply to depreciable assets. It was also held that the block of assets had ceased to exist.

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Procedure for regulating refund of excess amount of TDS deducted and/or paid

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CIRCULAR NO. 2/2011 [F.NO. 385/25/2010-IT(B)]
DATED 27-4-2011

The procedure for regulating refund of amount paid by the deductor in excess of the tax deducted at source (TDS) and/or deductible is governed by Board circular No. 285, dated 21-10-1980.
2. Subsequent to issue of circular No. 285, new sections have been inserted under Chapter XVII-B of the Income-tax Act, 1961. References have been received by the Board regarding inclusion of these sections also for the purpose of issue of refund of excess amount of the TDS deducted/deductible.
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Failure to voluntarily apply s. 50C does not attract penalty u/s 271(1)(c)

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The ITAT Mumbai has given an important decision on levy of penalty u/s 271(1)(c) of Income Tax Act when a person fails to declare capital gain as per the deeming fiction of section 50C,  I find this Judgment very useful and sharing it for the benefit of all concerneds.

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