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2016 (5) TMI 473 - HC - Income TaxCapital gains - member of an AOP taxed in place of AOP - distribution of assets - relinquishment of rights - whether settlement agreement reveals there was an agreement for outright transfer of land together with all the rights and as per Sec.2(47) the word transfer includes relinquishment of rights? - Held that:- The right person should be taxed and merely because the right person could not be taxed, it is not open to the Revenue to tax a wrong person. Merely because the AOP at the relevant point of time could not be assessed for tax is not a valid ground to tax a member of an AOP at the time when AOP is dissolved and the properties are distributed AOP was formed in the year 1995. The activities of the AOP were also continued for some time and it is only in the year 2004, on account of dispute, settlement was entered into between the members of AOP and the properties were distributed. It has been correctly held by the Tribunal that when distribution of assets takes place the same is not transfer of assets. The assessment at ₹ 14 Crore is on the basis of 20% share of the profit which the assessee would have earned in future. The Tribunal has taken note of the fact that the share of the income is not taxable in the hands of the members. Ultimately, the Tribunal found that the addition of ₹ 14 Crore made under the head of capital gain was incorrect and the said addition is ordered to be deleted. - Decided against revenue
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