ACIT vs. The Upper India Chamber of Commerce (ITAT Lucknow)

DATE: November 5, 2014 (Date of pronouncement)
DATE: November 11, 2014 (Date of publication)
AY: 2008-09
FILE: Click here to download the file in pdf format
S. 50C vs. s. 11: If a charitable institution invests the entire sale consideration in other capital asset, s. 50C should not be invoked

The only issue in the appeal is, therefore, whether while taking the Value of Sale of capital Asset being immoveable property in case of an institution registered u/s 12A whether the provisions of section 11(1A) will prevail or deeming provisions of section 50C will apply.

The assessee is a charitable society and is registered under section 12A of the Act. The question of applicability of provisions of section 50C of the Act on transfer of capital asset in the case of a charitable society was examined by the Tribunal in the case of ACIT vs. Shri. Dwarikadhish Temple Trust, Kanpur in I.T.A. No. 256 & 257/LKW/2011, in which the Tribunal has held that where the entire sale consideration was invested in other capital asset, provisions of section 50C of the Act should not be invoked. It is specifically mentioned in section 50C(1) of the Act that the stamp duty value is to be considered as full value of consideration received or accruing as a result of transfer for the purpose of section 48 of the Act. It is true that the assessee is a charitable trust and the income of the assessee has to be computed u/s 11 of the Act. As per sub section (1A) of section 11 of the Act, if the net consideration for transfer of capital asset of a charitable trust is utilized for acquiring new capital asset, then the whole of the capital gain is exempt.

One comment on “ACIT vs. The Upper India Chamber of Commerce (ITAT Lucknow)
  1. how simple law is not understood by revenue? Appears legal knowledge of very tax law is not understood by revenue officers , very sad situation indeed, better revenue sends its tax officers for appropriate training else both revenue and tax payers would waste in unnecessary legal expenses. No doubt you need create jobs not this way!

Leave a Reply

Your email address will not be published. Required fields are marked *