Allowing the petition, the Court held that the asset of land sold by the holding company assessee, transferred to subsidiary, sold as capital asset by transferee company; capital gains tax paid by transferee company on sale of 46 per cent. of land pursuant to joint development agreement accepted by Assessing Officer Revenue treating sale of asset by transferor company to transferee company as sale of “stock-in-trade”. Taking contrary view and treating very same transaction as “capital asset” for the buyer transferee company and as “stock-in-trade” for seller or transferor company impermissible. Revenue has no locus standi to initiate reassessment proceedings against the assessee transferor company by treating the very same transaction as “stock-in-trade”. Notice, subsequent reassessment proceedings and assessment order quashed. (AY. 2014-15)
Express News Papers Pvt. Ltd. v. ACIT (2026) 485 ITR 161 (Mad)(HC)
S. 147 : Reassessment-After the expiry of four years-Capital gains-Capital asset or stock-in-trade-Transferred to subsidiary-Exemption granted-Withdrawal of exemption-Proceedings under section 155(7B) to be within a period of four years from the end of previous relevant year in which conversion was made Held, initiation of proceedings beyond four years would be barred by limitation-Reassessment notice and order disposing the objection quashed.[S. 45, 47(iv), 47A, 144B, 148, 154, 155(7B), Art. 226]
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