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 )
DCIT v. Abdulsattar Suleman (Mum.)(Trib.) www.itaatonline.org
[Coram : Hon’ble Shri Prashant Maharishi (AM) and Hon’ble Shri Sandeep Singh Karhail (JM)]