TaxTMI 
TaxTMI 
2020 (4) TMI 222
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....ated and disposed off together for the sake of convenience. 3. The first common issue raised in these appeals is the addition made by the Assessing Officer (A.O. for short) in respect of long term capital gain of Rs. 9,63,17,800/- u/s. 50C of the Income Tax Act, 1961 ('the Act' for short) for A.Y. 2014-15 and Rs.(4,77,32,000)/- for A.Y. 2010-11. 4. Since the facts are common, we are referring to facts and figures from A.Y. 2010- 11. 5. Brief facts of the case are that the A.O. noted that the assessee company had shown to have transferred its land (Powai, Mumbai) to a partnership firm, M/s. Shreem Properties in which the assessee company was one of the partners. The plot was transferred as capital contribution on part of the ass....
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....17 has held as follow:- "Having heard both the sides, we find merit in the argument of the assessee for the reason that the provisions of section 45(3) deals with special cases of transfer of capital asset where the profits or gains arising from the transfer of capital asset by way of capital contribution or otherwise shall be chargeable to tax in the previous year in which such transfer takes place and for the purpose of section 48, the amount recorded in the books of account of the firm shall be deemed to be the full value of consideration received or accruing as a result of transfer. A plain reading of provisions of section 45(3) makes it dear that it conies into operation only in special cases of transfer between partnership fi....
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....t by a partner to a 'firm in which lie is or becomes a partner by way of capital contribution, then for the purpose of section 48, the amount recorded in the books of account affirm shall be deemed to befall value of consideration received or accruing as a result of transfer of a capital asset. The AO cannot import another deeming fiction created far the purpose of determination of full value of consideration as a result of transfer of a capital asset by importing the provisions of section 50C of the Act, The CIT(A), without appreciating the facts, simply upheld addition made by the AO by following the decision of ITAT, Lucknow Bench in the case of ACIT vs. Carlton Hotel Pvt. Ltd (supra) where the ITAT has simply observed that ....
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....l asset by a partner to a firm by way of capital contribution recorded in the books of account of the firm (i.e. Rs. 7,50,00,000 in this case) shall be deemed to be the full value of consideration for the purpose of computing capital gain. 6.1.5. It is observed that the AO, in para 5.4 of his order has relied on a decision of the Lucknow Bench of the Tribunal in the case of Carlton Hotel Pvt. Ltd. (122 TTJ 515). It is observed that the Hon'ble Bombay Tribunal while deciding the case of the Appellant has duly considered the said Lucknow Bench decision and has distinguished the same. 6.1.6. Respectfully following the decision of the Bombay Bench of the Tribunal in the Appellant's own case, the addition made by the AO....
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....of the building has been increased by Rs. 42,83,038/-. Therefore, the A.O. opined that the deprecation claimed by the assessee on "Building" will be restricted by 10% of the same, i.e., Rs. 4,28,304/- and depreciation of Rs. 54,87,333/- will be allowed (59,15,637 - 4,28,304). He further held that the book profit will also be increased by the sum of Rs. 4,28,304/-. 14. We note that the ld. CIT(A) has dealt with the issue as under: 6.2.2 In para 6 of the assessment order, the ld. A.O. has mentioned that depreciation of Rs. 59,15,637/- has been claimed after reducing Rs. 78,07,500/- from the block of asset. But as the deemed value of building has been increased by Rs. 42,83,038/- the depreciation is restricted to Rs. 54,87,333/-. ....