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DCIT v. Abdulsattar Suleman ( Mum)( Trib) www.itaatonline .org .

S. 45(3) : Capital gains – Transfer of capital asset to firm –Land – Stock in trade- Transferring the assets at nil value – Revaluation by the Firm and crediting the accounts of the partners in latter years – Addition cannot be made in the hands of the partners in the year of revaluation and crediting in the account of partner – Order of CIT(A) deleting the addition is affirmed . [ S. 45 , 48 , 147, 148 ]

The partner introduced the land  which was held  by him as capital asset    to the firm as stock in trade at nil value in the assessment year 2011-12 .  In the assessment year 2013 -14 the firm revalued the assets and credited  in the account of the partner at Rs . 13.96 crores.  The Assessing Officer reopened the assessment of the partner and  charged the capital gains at Rs 13-96 in the hands of the partner in the Assessment  year 2013 -14 .   On appeal the CIT(A) deleted the  addition on the ground that the asset was transferred in the assessment year 2011 -12 and not in the  assessment year 2013 -14 . On appeal by the Revenue , Tribunal  dismissing the appeal of  the Revenue , held that section 45(3) does not seek to substitute by any other figure the value agreed between the partners at which the asset is transferred to the firm .  As the appeal of the Revenue is dismissed , other legal grounds  on reassessment was not dealt with . ( ITA No. 1658/Mum/ 2023 / CO.No.83/Mum/2023 dt 21 -12 -2023 , Bench “A” ) ( AY. 2013 -14 )