TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 746
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....t recorded in the books of the joint venture and as such there was on capital gain at first place which is not the issue in this case. b. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the importance of the insertion of word "assessable" in Section 50C, which makes it even more clear that even in the absence of registration of the deed, the stamp duty value / market value has to be adopted as deemed full value of consideration in Section 48 of the Act. 3. We have heard rival submissions and perused the materials available on record. Both the parties mutually agreed that the grounds raised by the Revenue are squarely covered by the order of this Tribunal in assessee's own case for A.Y.2012-13 in ITA No.7442/Mum/2016 dated 16/10/2019. 3.1. We find that the ld. CIT(A) had infact relied on the order passed by the predecessor for A.Y.2012-13 in assessee's own case and granted relief to the assessee. This order of the ld. CIT(A) for A.Y.2012-13 has been upheld by this Tribunal vide its order dated 16/10/2019. The relevant observations of the ld. CIT(A) in respect of the impugned issue are as under:- 6.2 Ground No. 2: Vide....
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....plain reading of the said provision would reveal that the profits or gains arising from the transfer of a capital asset to another entity by way of capital contribution or otherwise shall be chargeable to tax. The profit or gain would arise only when the transfer has been made at a price which is more than the cost price and the difference between the cost price and amount at which transfer has taken place can be charged under section 45(3). In the instant case the purchase price of land as recorded in the transferor's book and recorded in the books of the joint venture are the same. As per provisions of section 45(3) price of land recorded in the books of joint venture is required to be considered as receipt of full value of consideration received or accrued as a result of transfer of capital assets. Once the price recorded in the joint venture's books is treated as full value of consideration, the provisions do not permit substitution of any value so as to make addition under section 45(3). In fact the approach of the A.O. is also not correct in the sense that under section 45(3) once the full value of consideration is taken as the amount recorded in the books of the join....
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....otal cost Rs. 4272358/- [as per original deed of purchase dt. 7.03.1998] [applicable index 331 x 785] assesses share in property 20.04% hence indexed cost Rs. 20,30,078/- - copy of purchase deed already placed on your record 20,30,078 Cost of transfer/ cost of improvement - Amount payable to SEL for reimbursing capital expenditure by SEL incurred on plot no. 33 Rs. 200357/- and plot no. 19 Rs. 40,013/- copy of MOU enclosed 6,01,070 Long Term Capital Gain 2,22,53,129 Being of the view, that the LTCG on the transfer of the aforesaid property was to be supposedly worked out as per Sec. 50C of the Act, the A.O called upon the assessee to put forth his explanation as regards the same. In reply, the assessee tried to impress upon the A.O that the provisions of Sec.50Cwerenot attracted in his case for two fold reasons, viz.(i).that, as per Sec. 45(3) the amount credited to the partners account was deemed to be the full value of consideration accruing or received by the partner; and (ii). that, as introduction of asset by the partner in a firm by way of his capital contribution was not a transfer, therefore, the provisions of Sec. 50C were not attracted. However, the A.O not bein....
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.... would not be applicable to such transaction. As regards the addition of Rs. 5,37,46,284/- that was made by the A.O u/s 2(22)(e) of the Act, it was observed by the CIT(A), that none of the shareholder of M/s Gayatri Films & Music Pvt. Ltd. was having more than 20% of equity capital and was simultaneously having more than 10% shareholding in the lending company. Also, it was observed by the CIT(A), that as Sec. 2(22)(e) referred to the beneficial ownership of the shareholder, therefore, the holding of the assessee in his individual capacity could not be clubbed with the holding of his HUF. On a similar footing, it was observed by him, that the holding of the other shareholder i.e Sh. Jyoti Sagar in his individual capacity could also not be combined with his shareholding in the capacity as that of Executor to the Estate of Late Subhash Sagar. In the backdrop of his aforesaid deliberations, it was concluded by the CIT(A) that the addition made by the A.O u/s 2(22)(e) was not sustainable and was liable to be vacated. 5. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. Order of the CIT(A) has been assailed by the revenue before us on....
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....building or both, is less than the value adopted or assessed or assessable by any authority of a state government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purpose of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. As observed by us hereinabove, both of the aforesaid statutory provisions i.e Sec. 45(3) and Sec. 50C envisages a deeming provision for the purpose of adopting the "full value of consideration‟ received or accruing as a result of transfer of the "capital asset‟, in order to work out the "capital gain‟ in the hands of the assessee. In our considered view, the deeming provisions of Sec. 45(3) would be rendered as otiose and the working of the said statutory provision would stand jeopardised, in case, the deeming provisions of Sec. 50C are allowed to be transposed and read into the same. For the purpose of resolving the controversy involved, it would be relevant to consider the circumstances which had led to insertion of Sec. 45(3) on the statute w.e.f 01.04.1988. As can be gathered from a perusal of C....
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....ising on the transfer of a "capital asset‟ by a partner as its capital contribution in a firm or other association of persons or body of individuals; and (ii). the second limb, is a deeming fiction which enables adoption of the amount recorded in the "books of accounts‟ of the firm or other association of persons or body of individuals, as the "full value of consideration" received or accruing as a result of the transfer of the capital asset. As can be gathered from a perusal of Sec. 45(3), the "charging‟ of the transaction therein envisaged to levy of capital gain tax and quantification of such tax, both go hand in hand for facilitating quantification of the capital gains tax. Now, in case the quantification of the capital gain tax as envisaged in Sec. 45(3) is substituted by Sec. 50C, then, in our considered view, the charging to tax of the transaction under consideration would in itself stand jeopardised and the section would be rendered as inoperative. In sum and substance, the provisions of Sec. 45(3) cannot be substituted. In other words, the deeming of the amount recorded in the "books of accounts‟ of the firm or other association of persons or body o....
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....n would reveal that the profits or gains arising from the transfer of a capital asset to another entity by way of capital contribution or otherwise shall be chargeable to tax. The profit or gain would arise only when the transfer has been made at a price which is more than the cost price and the difference between the cost price and amount at which transfer has taken place can be charged under section 45(3). In the instant case the purchase price of land as recorded in the transferor's book and recorded in the books of the joint venture are the same. As per provisions of section 45(3) price of land recorded in the books of joint venture is required to be considered as receipt of full value of consideration received or accrued as a result of transfer of capital assets. Once the price recorded in the joint venture's books is treated as full value of consideration, the provisions do not permit substitution of any value so as to make addition under section 45(3). In fact the approach of the A.O. is also not correct in the sense that under section 45(3) once the full value of consideration is taken as the amount recorded in the books of the joint venture, the capital gain can be....