2024 (12) TMI 24

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssessment year 2014-15 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter the 'Act') vide order dated 30.12.2016. 2. The first issue in this appeal of Revenue is against the order of CIT(A) treating the sale of land at Tiruvottiyur High Road as Long Term Capital Gain as against assessed by AO as Short Term Capital Gain. For this, Revenue has raised the following grounds:- 1) The CIT(A) has erred on the facts of the case in treating the capital gains on sale of land at Tiruvottiyur High Road as Long term Capital gain instead of Short Term Capital Gain without appreciating that : a) There are effectively two transactions involved. The first transaction relates to the assessee in the capacity of share holder receiving immovable property....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....., falling from 25.04.2013 to 02.06.2013. The assessee claimed this land as long term capital asset but the AO treated the same as short term capital asset. The AO by going through the provisions of section 2(47) of the Act noted that the property received by assessee on liquidation of company is transferred within the provisions of section 2(47) of the Act and the provisions of section 46(2) of the Act. The AO treated this holding period by the assessee from 10.12.2012 i.e., the date of release deed by the company to the assessee and sold these lands on several dates starting from 25.04.2013 to 06.08.2013. The AO treated this land as short term capital gain because it is sold within one year. Aggrieved, assessee preferred appeal before CIT....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... company liquidation cannot be treated as transfer. Being the shareholder, the, appellant received his share in the form of capital asset on liquidation of the company and on its receipt, the appellant has also paid tax u/s 46(2) of the Act. As per the provisions of section 46(1), where the assets of a company are distributed to its shareholders on its liquidation, such distribution shall not be regarded as a transfer by the company for the purposes of section 45. In a situation when the land received by the appellant was not even a transfer in the hands of the company in liquidation, the land received by the appellant would apparently be a continuation of share in the company in the form of land till its further transfer. Therefore, till t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ded to determine whether the asset is a short term capital asset or long term capital asset. Admitted position is that the property was held by the company for more than 36 months and therefore, it was claimed as long term capital asset. The ld.counsel for the assessee before us filed copy of provisions of section 2(42A) of the Act and drew our attention to the following Explanation 1:- Section 2(42A) [Explanation 1] - (i) In determining the period for which any capital asset is held by the assessee - ......... ........ (b) in the case of a capital asset which becomes the property of the assessee in the circumstances mentioned in 1 [sub-section (1)] of section 49, there shall be included the period for which the asset was held by ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... capital gain u/s.46(2) of the Act and also claimed deduction u/s. 54F of the Act. The AO during the course of assessment proceedings noticed from perusal of release deed dated 10.05.2013 that the value taken by the assessee is Rs. 10,00,00,000/- as against the guideline value of the entire property at Rs. 29,46,83,400/-. The assessee claimed that he has not received any consideration pursuant to liquidation and there is no transfer and hence, there cannot be any application of provisions of section 50C of the Act for the present case. The assessee claimed that the assessee has received land upon liquidation of his company and once liquidation of company happens and consequent devolution of asset on the parties, it cannot be considered as t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed [or assessable] by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed [or assessable] shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer A look at the provisions of section 50C of the Act shows that the same applies to a consideration received or accruing as a result of the transfer by an assessee of a capital asset. In the present case, the appellant has not received any c....