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2019 (8) TMI 229 - AT - Income TaxDetermination of capital gain in the hands of company who has succeeded partnership firm - cost of acquisition - Applicability of a subsequent amendment brought after the filing of the return of income - scope of amended provisions of section 49(1)(iii)(e) - retrospective or prospective - Addition of capital gain arising from sale of immovable property - considering the cost of acquisition as in the hand of the predecessor partnership firm which was succeeded by the assessee - Assessee claimed that cost of acquisition will the value on which assets was taken from partnership firm - HELD THAT:- Since the transfer of capital asset by a firm to the company as a result of succession of the firm by the company falls under section 47(xiii) was not covered by the pre amended provisions of section 49, and therefore, to bring the nature of transfer as provided under section 47(xiii), the amendment was brought into Statute whereby sub-clause (e) to section 49(1)(iii) was inserted. In the absence of this amendment, the case of transfer falling under section 47(xiii) was outside the ambit of mischief of deeming fiction of section 49. Therefore, the purpose of the amendment was to bring all these cases in the ambit of deeming fiction as provided u/s 49. It is also not in dispute that at the time of filing the return of income on 30th September, 2009 the law which was amended by Finance Act, 2012 was not in the Statute. Hon’ble Supreme Court in case of CIT vs. Hindustan Electro Graphites Ltd [2000 (3) TMI 2 - SUPREME COURT] while dealing with the question of applicability of a subsequent amendment brought after the filing of the return of income has held that the law prevailing at the time of filing of the return has to be applied and the amendment which could not have been known before the Finance Act came into force cannot be applied for additional tax liability to be levied. It will amount to punishing the assessee for no fault of his. Law to be applied which is in force in the relevant assessment year unless and otherwise provided expressly or by necessary implication a clarificatory amendment by insertion of an explanation can be read into the main provision but if a change is brought in the existing law by insertion of a new provision then the same cannot be applied in the case when no such law was in force at the relevant point of time and, therefore, a new tax liability cannot be created by a subsequent amendment in respect of a transaction as well as the return of income filed when such law was not in the Statute book. Hence we hold that the amended provisions of section 49(1)(iii)(e) cannot be applied in the case of the assessee simply because at the time of filing of the return of income the said provision was not in force. Accordingly, the addition sustained by the ld. CIT (A) by applying the amended provisions of section 49(1)(iii)(e) is not sustainable and liable to be deleted. - Decided in favour of assessee.
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