(i) Dharmada collections are not taxable as income, (ii) S. 50C does not apply to the purchaser of property
(i) It is not disputed that Dharmarth receipts are not taxable. This is as per the CBDT Circular (supra), as also the following decisions: i. CIT Vs. Bijli Cotton Mills (P) Ltd., (1979) 116 ITR 60 (SC) ii. CIT Vs. Gheru Lal Bal Chand, (1978) 111 ITR 134 (P&H) iii. Addl. CIT Vs. Channoo Lal Damodar Dass, (1978) 113 ITR 759 (All.) iv. Addl. CIT Vs. Dalsukhrai Jaidayal, (1979) 117 ITR 466 (All.) v. Nathu Ram Shiv Narain Vs. CIT, (1982) 134 ITR 625 (P&H) vi. CIT Vs. E.H. Kathawala & Co., (1982) 135 ITR 384 (Bom.) vii. Chunnilal Onkarlal (HUF) Vs. CIT, (1982) 135 ITR 580 (MP) viii. CIT Vs. Ratilal Popatlal Shah, (1984) 43 CTR 4 (Bom.)
(ii) A plain reading of Section 50C of the Act shows that the income under the head “capital gains” is applicable to the sale of immovable property, and not to “purchase” thereof. Therefore, the provisions of Section 50C(1) of the Act are not applicable to the case of a purchaser. It is well settled that the legislature chooses its words with utmost care. When the words of a particular provision are explicit, clear and unambiguous, there is no room for interpretation thereof and as such, the legislative intent qua such a provision is not required to be gone into, as has been wrongly done by the learned CIT(A) in the present case. The section talks of ‘consideration received or accruing’. Period. ‘Consideration paid’ cannot be imported, when the legislature has itself not deemed it fit to incorporate anything to such effect in the section.