I assigned my leasehold plot for less than the circle rate. Can the officer substitute the stamp duty value under s.50C?
No, on this Tribunal's reasoning. Section 50C(1) is worded 'land or building or both' and not 'any right in land or building', and the Delhi Tribunal held the two expressions are distinct, so a transfer of leasehold rights in land or building falls outside the section and the stamp duty value cannot be substituted. Read this together with the Bombay High Court decision in Vidarbha Veneere Industries, which has since taken the opposite view.
Decided by the ITAT (ITAT Delhi Bench 'E' — G.S. Pannu (Vice President) and Sudhanshu Srivastava (Judicial Member); order delivered by G.S. Pannu, VP; IT Appeal No. 165 (Delhi) of 2020; AY 2015-16) on 2020-10-12, reported as (2021) 186 ITD 593 / [2021] 123 taxmann.com 213 (Delhi)(Trib.); IT Appeal No. 165 (Delhi) of 2020; AY 2015-16. It bears on section 50C, section 50C(1), section 45 of the Income Tax Act 1961, in Capital Gains matters.
Plots allotted by NOIDA, GNIDA, MIDC and similar development authorities are almost never sold freehold - what changes hands is an assignment of the lease, and the sub-registrar still charges stamp duty on a circle-rate figure. If s.50C does not reach a right in land, the entire deemed-consideration addition falls away and the DVO reference machinery in s.50C(2) never comes into play. The department's counter is that the assessee is nevertheless transferring an interest in immovable property and that a lease of ninety years is ownership in all but name; that is precisely the argument the Bombay High Court has now accepted.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee held land on a ninety-year lease, constructed a tower on it and sub-leased a portion of it. In the assessment the officer found that the stamp duty value of the transaction exceeded the consideration shown and applied s.50C to compute the capital gain on the difference. The assessment year was 2015-16.
The addition could not be made. Section 50C(1) reaches only a capital asset being land or building or both and does not extend to a transfer of leasehold rights in land and building, so the section could not be invoked on this transfer; the order of the Commissioner (Appeals) was set aside and the Assessing Officer directed to delete the addition of Rs. 240,91,67,743 (paragraph 13). Because the assessee succeeded on that preliminary plea, every other ground was left unadjudicated as academic (paragraph 14) — including the complaint that the assessment had been completed without waiting for the Departmental Valuation Officer, whose report, when it came, valued the six properties at Rs. 193,56,67,000 against the stamp valuation of Rs. 399,97,79,799 which the Assessing Officer had adopted. The Revenue's objection that the leasehold point had not been taken before the lower authorities was rejected: it arises from the phraseology of s.50C(1) itself, the necessary facts were already on record, and in any event a question of law on accepted facts may be raised before the Tribunal (paragraph 12).
The Tribunal took the point from the words of the Act and from a contrast inside it. Section 50C(1) deems the stamp value to be the full value of consideration where the asset transferred is 'land or building or both'; s.54D(1), by contrast, speaks of a capital asset 'being land or building or any right in land or building' (paragraphs 9 and 10). That the legislature used the wider formula in one place and not in the other showed the two expressions to be distinct in coverage, and on the principle that the express use of one expression excludes the other — supported by the Supreme Court in GVK Industries Ltd. — a right in land could not be read into s.50C(1) (paragraph 11). The Tribunal recorded that the same distinction had found approval in the Bombay High Court in Greenfield Hotels & Estates, and that a coordinate Bench in Manish Traders had held a 90-year leasehold right to be a capital asset to which s.50C does not apply. The facts, taken from the order and no longer from a secondary report: the assessee held the land from the New Okhla Industrial Development Authority under a 90-year lease commencing April 2006, constructed the Tower C building of the Logix Cyber Park on it, and sub-leased portions under tripartite deeds in which NOIDA was lessor, the assessee lessee and the buyer sub-lessee; it was not a perpetual lease (paragraph 6).
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'.
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Handle my notice → Ask a CA on WhatsAppNo, on this Tribunal's reasoning. Section 50C(1) is worded 'land or building or both' and not 'any right in land or building', and the Delhi Tribunal held the two expressions are distinct, so a transfer of leasehold rights in land or building falls outside the section and the stamp duty value cannot be substituted. Read this together with the Bombay High Court decision in Vidarbha Veneere Industries, which has since taken the opposite view. This was decided by the ITAT (ITAT Delhi Bench 'E' — G.S. Pannu (Vice President) and Sudhanshu Srivastava (Judicial Member); order delivered by G.S. Pannu, VP; IT Appeal No. 165 (Delhi) of 2020; AY 2015-16) and bears on section 50C, section 50C(1), section 45 of the Income Tax Act 1961. It is reported as (2021) 186 ITD 593 / [2021] 123 taxmann.com 213 (Delhi)(Trib.); IT Appeal No. 165 (Delhi) of 2020; AY 2015-16. Plots allotted by NOIDA, GNIDA, MIDC and similar development authorities are almost never sold freehold - what changes hands is an assignment of the lease, and the sub-registrar still charges stamp duty on a circle-rate figure. If s.50C does not reach a right in land, the entire deemed-consideration addition falls away and the DVO reference machinery in s.50C(2) never comes into play. The department's counter is that the assessee is nevertheless transferring an interest in immovable property and that a lease of ninety years is ownership in all but name; that is precisely the argument the Bombay High Court has now accepted. If it applies to you, the first step is this: Read the deed first and establish on its face that what was transferred was an assignment of a lease, not the land itself, and that the lessor authority remains the owner.
The assessee held land on a ninety-year lease, constructed a tower on it and sub-leased a portion of it. In the assessment the officer found that the stamp duty value of the transaction exceeded the consideration shown and applied s.50C to compute the capital gain on the difference. The assessment year was 2015-16. The matter was decided on 2020-10-12 by the ITAT (ITAT Delhi Bench 'E' — G.S. Pannu (Vice President) and Sudhanshu Srivastava (Judicial Member); order delivered by G.S. Pannu, VP; IT Appeal No. 165 (Delhi) of 2020; AY 2015-16). On those facts the ITAT held as follows. The addition could not be made. Section 50C(1) reaches only a capital asset being land or building or both and does not extend to a transfer of leasehold rights in land and building, so the section could not be invoked on this transfer; the order of the Commissioner (Appeals) was set aside and the Assessing Officer directed to delete the addition of Rs. 240,91,67,743 (paragraph 13). Because the assessee succeeded on that preliminary plea, every other ground was left unadjudicated as academic (paragraph 14) — including the complaint that the assessment had been completed without waiting for the Departmental Valuation Officer, whose report, when it came, valued the six properties at Rs. 193,56,67,000 against the stamp valuation of Rs. 399,97,79,799 which the Assessing Officer had adopted. The Revenue's objection that the leasehold point had not been taken before the lower authorities was rejected: it arises from the phraseology of s.50C(1) itself, the necessary facts were already on record, and in any event a question of law on accepted facts may be raised before the Tribunal (paragraph 12).
The Tribunal took the point from the words of the Act and from a contrast inside it. Section 50C(1) deems the stamp value to be the full value of consideration where the asset transferred is 'land or building or both'; s.54D(1), by contrast, speaks of a capital asset 'being land or building or any right in land or building' (paragraphs 9 and 10). That the legislature used the wider formula in one place and not in the other showed the two expressions to be distinct in coverage, and on the principle that the express use of one expression excludes the other — supported by the Supreme Court in GVK Industries Ltd. — a right in land could not be read into s.50C(1) (paragraph 11). The Tribunal recorded that the same distinction had found approval in the Bombay High Court in Greenfield Hotels & Estates, and that a coordinate Bench in Manish Traders had held a 90-year leasehold right to be a capital asset to which s.50C does not apply. The facts, taken from the order and no longer from a secondary report: the assessee held the land from the New Okhla Industrial Development Authority under a 90-year lease commencing April 2006, constructed the Tower C building of the Logix Cyber Park on it, and sub-leased portions under tripartite deeds in which NOIDA was lessor, the assessee lessee and the buyer sub-lessee; it was not a perpetual lease (paragraph 6). In the words reproduced by the source cited on this page: "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'." The decision followed or applied GVK Industries Ltd. v. ITO (2011) 4 SCC 36 — followed, paragraph 11; Manish Traders v. ITO [IT Appeal No. 4481 (Delhi) of 2016, dated 22-7-2019] — followed, paragraph 11; CIT v. Greenfield Hotels & Estates (P.) Ltd. [2017] 77 taxmann.com 308 / 245 Taxman 125 / (2016) 389 ITR 68 (Bom.) — followed, paragraph 11.
It was decided by the ITAT on 2020-10-12 and is reported as (2021) 186 ITD 593 / [2021] 123 taxmann.com 213 (Delhi)(Trib.); IT Appeal No. 165 (Delhi) of 2020; AY 2015-16. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 50C, section 50C(1), section 45, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The addition could not be made. Section 50C(1) reaches only a capital asset being land or building or both and does not extend to a transfer of leasehold rights in land and building, so the section could not be invoked on this transfer; the order of the Commissioner (Appeals) was set aside and the Assessing Officer directed to delete the addition of Rs. 240,91,67,743 (paragraph 13). Because the assessee succeeded on that preliminary plea, every other ground was left unadjudicated as academic (paragraph 14) — including the complaint that the assessment had been completed without waiting for the Departmental Valuation Officer, whose report, when it came, valued the six properties at Rs. 193,56,67,000 against the stamp valuation of Rs. 399,97,79,799 which the Assessing Officer had adopted. The Revenue's objection that the leasehold point had not been taken before the lower authorities was rejected: it arises from the phraseology of s.50C(1) itself, the necessary facts were already on record, and in any event a question of law on accepted facts may be raised before the Tribunal (paragraph 12). It arises in Capital Gains matters, on section 50C, section 50C(1), section 45 of the Income Tax Act 1961, and was decided by ITAT Delhi Bench 'E' — G.S. Pannu (Vice President) and Sudhanshu Srivastava (Judicial Member); order delivered by G.S. Pannu, VP; IT Appeal No. 165 (Delhi) of 2020; AY 2015-16. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Take the point at the assessment stage as a jurisdictional objection to s.50C, not as a valuation dispute, because once you argue quantum you have conceded that the section applies. Check where the property is: in Maharashtra and Goa the Bombay High Court in Vidarbha Veneere Industries Ltd. v. ITO has held s.50C does apply to an assignment of leasehold rights, so this order will not carry there. Keep the s.50C(2) DVO request on the record in the alternative, so that a finding against you on the jurisdictional point does not leave the circle rate unchallenged.
Overruled. The proposition this order rests on has been rejected by a High Court. In Vidarbha Veneere Industries Ltd. v. ITO (2025) 344 CTR 322 / 249 DTR 249 / 174 taxmann.com 223 / (2026) 484 ITR 132 (Bom.), the Bombay High Court held that leasehold rights in land are a capital asset - property may be held without being owned - and that s.50C therefore reaches the transfer or assignment of leasehold rights in land allotted by MIDC. Digests of that judgment record it as overruling Atul G. Puranik v. ITO (2011) 58 DTR 208 (Mum.)(Trib.) and distinguishing CIT v. Greenfield Hotel & Estates (P) Ltd. (2016) 389 ITR 68 (Bom.), and add that the Revenue had never challenged Atul G. Puranik, which is why it had stood so long. One correction to what stood here: this order is not built on Atul G. Puranik. That decision appears only among counsel's citations at paragraph 6 and is never adopted. What the Bench itself followed, at paragraph 11, is GVK Industries Ltd., the Bombay High Court in Greenfield Hotels & Estates and the coordinate Bench in Manish Traders - so the Bombay authority this order actually relies on is the one Vidarbha Veneere distinguished, which is if anything a more direct answer to it. The Tribunal has since fallen in behind the High Court: in Mahendra Silk Mills Pvt. Ltd. v. ITO the Mumbai Bench rejected the argument that leasehold rights fall outside s.50C, relying on Vidarbha Veneere, in a report dated 1 April 2026. Two qualifications, honestly stated. This order was itself never taken up - no appeal against it and no affirmation of it was found - and a Bombay judgment does not bind the Delhi Benches. But the reasoning it adopts has been rejected by a High Court and is no longer being followed at Tribunal level, so it cannot be cited today as though the question were settled in the assessee's favour. One later Delhi Tribunal decision that cites this order's reporter citation, Shivdeep Tyagi v. ITO [2024] 163 taxmann.com 614 (Delhi - Trib.), 18 June 2024, surfaced on a citation search and was not opened, so nothing is said here about how it treats this order. Note also that itatonline's own answer on this question, posted 27 May 2021, still states the position by reference to this order alone and has not been brought up to date; do not take that page as current. That finding was checked against a published source, which is linked on this page, on 2026-08-24. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order has now been read in full in a subscription case-law database, and three statements in the earlier note must be withdrawn. The sentence quoted below is not a digest's headnote: it is the Tribunal's own language, word for word, at paragraph 11. The date of the order is 12 October 2020, the appeal is IT Appeal No. 165 (Delhi) of 2020 for assessment year 2015-16, and the Bench is Delhi Bench 'E', G.S. Pannu (Vice President), who delivered the order, and Sudhanshu Srivastava (Judicial Member). And the facts no longer come from a secondary report: the 90-year lease from NOIDA commencing April 2006, the Tower C building of the Logix Cyber Park constructed on it and the sub-leases of portions of it are all in paragraph 6. The reliance on GVK Industries is confirmed at paragraph 11, but the engine of the reasoning is the contrast with s.54D(1) at paragraphs 9 and 10, which no secondary account carried. What the order does not do is follow Atul G. Puranik, which appears only among counsel's citations; the decisions the Bench itself adopted are GVK Industries, the Bombay High Court in Greenfield Hotels & Estates and the coordinate Bench in Manish Traders. Do not push the decision beyond the words of s.50C(1): it says nothing about whether the assignment is a transfer at all, nothing about s.50CA or s.56(2)(x), and nothing about a lease so long that the department argues it is ownership in substance. Most importantly, it is a Tribunal order and the Bombay High Court has since held the other way on the same question. It does not tell you whether the same reasoning holds for s.43CA, s.50CA or s.56(2)(x), each of which is worded differently. It does not deal with a transfer of leasehold rights together with a building the assessee owns outright, where the consideration would have to be split. It does not address s.50D, which supplies a fair market value where consideration is not ascertainable. And it decides nothing about the valuation dispute that was the rest of the case: because the assessee won on the preliminary point, the grounds about the assessment being completed without waiting for the Departmental Valuation Officer, and about the Commissioner (Appeals) preferring the stamp value to the valuation officer's much lower figure, were left unadjudicated as academic. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The addition could not be made. Section 50C(1) reaches only a capital asset being land or building or both and does not extend to a transfer of leasehold rights in land and building, so the section could not be invoked on this transfer; the order of the Commissioner (Appeals) was set aside and the Assessing Officer directed to delete the addition of Rs. 240,91,67,743 (paragraph 13). Because the assessee succeeded on that preliminary plea, every other ground was left unadjudicated as academic (paragraph 14) — including the complaint that the assessment had been completed without waiting for the Departmental Valuation Officer, whose report, when it came, valued the six properties at Rs. 193,56,67,000 against the stamp valuation of Rs. 399,97,79,799 which the Assessing Officer had adopted. The Revenue's objection that the leasehold point had not been taken before the lower authorities was rejected: it arises from the phraseology of s.50C(1) itself, the necessary facts were already on record, and in any event a question of law on accepted facts may be raised before the Tribunal (paragraph 12).
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