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2010 (11) TMI 137 - ITAT, MUMBAIAddition of income - capital gain on transfer of the properties by the firm to one of its partners on dissolution of the firm - dissolution of the firm by law - Assessing Officer made an addition of Rs. 62,13,027 to the total income of the assessee on account of difference between FMV and book value of assets - Held that: the assessee took over the project which the firm was constructing in his individual capacity. Therefore there was a transfer of capital asset of the firm viz., work-in-progress of the project which the firm was carrying on. - The CIT(A) in our view misdirected himself by applying the ratio of the Hon’ble Supreme Court in the case of Sakthi Trading Co. (2001 -TMI - 6026 - SUPREME Court), which decision is not applicable to the facts of the present case at all - there was a transfer of a capital asset on dissolution of the firm by the firm to one of its partners and therefore the capital gain to the firm on such transfer has to be brought to tax. Labour charges - In the year in the project is completed, it may not be possible for the Assessing Officer to embark upon an enquiry as to whether labour charges incurred for an earlier assessment year which has already been considered as part of WIP, is genuine or not -CIT(A) ought to have rendered a finding as to whether the labour charges claimed by the assessee were true, genuine or not. - Matter remanded back.
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