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2019 (12) TMI 312 - AT - Income TaxTransfer of property u/s 2(47) or not - capital gain u/s 45 - transfer of land by the partners to the partnership firm - absence of consideration - "Transfer" as per Act states u/s 2(47)(iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock in trade of a business carried on by him, such conversion or treatment" - HELD THAT:- Land was transferred by the assessee to the partnership firm in the year ending as on 31st March 2005 corresponding to the assessment year 2005-06. This fact can be verified from the partner’s capital account in the partnership firm which is placed on page 6 of the paper book. Admittedly, the impugned land was transferred by the partners to the firm as capital contribution which was recorded as stock-in-trade in the books of the firm. As such there was no transfer of capital assessee as stock-in-trade in the books of the assessee. Therefore in our considered view, there cannot be any application of the provisions of section 45(2) of the Act in the hands of the assessee. Provisions of section 45(3) of the Act requires to take the sale consideration in the case of transfer of any capital asset by the partner to the firm as capital contribution which was recorded in the books of accounts of the firm. In the case on hand, there is no dispute that the value of such assets transferred by the partner to the firm was recorded at the book value which can be verified from the financial statements of the assessee placed on pages 2 to 7 of the paper book. Accordingly, there cannot be any income in the hands of the assessee on account of transfer of such assets as capital contribution. In view of the above, we do not find any infirmity in the order of the learned CIT-A. Hence the ground of appeal of the Revenue is dismissed. Deduction u/s 80IB - AO observed that, partner did not claim remuneration and interest on capital from the firm in order to claim the higher deduction under section 80(IB)(10) - whether the assessee is bound to draw the amount of remuneration and interest from the partnership firm in pursuance to the date of partnership firm? - HELD THAT:- The clauses mentioned in the partnership deed are not mandatory but made to avoid any ambiguity and misunderstanding between the partners. As such, there is no dispute among the partners for not claiming the remuneration/interest on capital in the profit and loss account of the firm. Therefore, in our considered view the conduct of the partners of the firm suggests that it was agreed not to claim any remuneration/interest on the capital account. See SMT. MALA TANDON [2011 (6) TMI 855 - ITAT AMRITSAR] We note that it is not compulsory to claim the remuneration/interest on partner’s capital account despite the fact there was a specific clause in the deed of partnership. Accordingly, we do not find any infirmity in the order of the learned CIT (A). Hence the ground of appeal of the Revenue is dismissed.
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