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2012 (12) TMI 686 - AT - Income TaxTransfer of Asset – whether covered by the word “otherwise” contained in section 45(4) - Held that:- The assessee after getting the valuation done from the Registered Valuer had distributed the assets equally though on WDV equally amongst all the four partners by crediting the current capital account. Once the assets have been removed from the capital account of the partners and have been credited to the current account, the partners are free to withdraw the said amount as and when they require. Therefore, it is a clear cut case of transfer of capital assets by way of distribution which is covered by the word “otherwise” contained in section 45(4). Value in respect of residential house - value pertains to the building OR land - Held that:- The residential house can not be separate between land & building . The assessee had never objected to the value taken by the AO during assessment proceedings even after show cause was given to the assessee. The assessee did not exercise option for the fair market value as on 01.04.1981 or the cost of residential house as on 01.04.1981 during assessment proceedings inspite of the fact option given vide show cause letter dated 26.12.2008. Therefore, the value taken by the AO at Rs.18,00,000/- is correct. Value of showroom at Gulmarg Bagh taken by the AO as on 01.04.1981 was duly communicated to the assessee vide show cause dated 26.12.2008 and sufficient opportunity was given to opt either for book value or fair market value. But the same option was never exercised by the assessee during the assessment proceedings. Transfer with regard to the land at Gulmarg was a lease property and the land cannot be transferred without the prior approval of the authority - It was correctly observed by the AO that the lease of land was more than a period of 12 years and therefore, assessee is the deemed owner. The arguments of the assessee, therefore, cannot help the assessee. Regarding boundary wall, the same is also a capital asset, has rightly been observed by the A.O. Gulmarg Hut - same had been dismantled and construction of the hotel was going on when asset was transferred in the name of the partners - Held that:- As in this regard, it was submitted that the construction of hotel was being carried out through M/s. Manzoor Construction through whom an amount of Rs.19 lacs was advanced.As regards the order of the CIT(A), the same is not a speaking order and he has ignored the findings of the AO who has rightly taken the fair market value and after taking into consideration the indexed cost and has rightly computed the long term capital gain vide paras 12(a) to 12(d) of his order. Therefore,no infirmity in the order of the A.O. in this regard. Thus, all the grounds of the Revenue are allowed - appeal of the Revenue allowed.
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