ACIT v ETC Industries Ltd. [2012] 21 taxmann.com 457 (Indore – Trib.)

The deeming fiction created in section 50 modifies the provisions of section 48 only to the extent of modifying the term ‘cost of acquisition’.

• The deeming fiction created u/s 50C operates in a specific field which is different from the field in which section 50 is applicable. The deeming fiction under section 50C is regarding full value of consideration of land or building or both.

• If there was any legislative intention to exclude the applicability of the provisions of section 50C to cases involving transfer of land and building covered by section 50, nothing prevented the legislature to make the proviso in the statute.

• There is no exclusion of applicability of one fiction in a case where other fiction is applicable so long as there is no conflict in the two legal fictions which operate in different fields.

• No distinction is made between a depreciable asset and a non-depreciable asset in the provisions of section 50C; therefore, it cannot be said that said provision is not applicable in a case of transferable asset which is covered by provisions of section 50.

It is pertinent to note that this ruling has followed the Special Bench decision of Mumbai ITAT in the case of United Marine Academy (2011) 138 TTJ (Mum) (SB) 129