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2022 (2) TMI 287 - HC - Income TaxAddition towards capital gains u/s 45(3) - Land in question in the instant case was acquired with intent to transfer it as Capital contribution in the Partnership firm - whether it is beyond the scope of Section 45(3) ? - HELD THAT:-VIt is not disputed before us that the substantial questions of law which have been raised in this appeal by the revenue have been held to be not substantial questions of law in the assessee’s own case for subsequent assessment year [2022 (2) TMI 186 - CALCUTTA HIGH COURT] as held Section 45(3) seeks to determine the capital gains with reference to the value of the asset recorded in the books of account of the firm. The value so recorded is statutorily deemed to be the full value of consideration received or accruing to the partner as a result of the transfer of the capital asset to the firm. Thus, Section 45(3) does not seek to substitute by any other figure the value agreed between the partners at which the asset is transferred by a partner to the firm. Tribunal agreed with CIT(A) that after conversion of inventory into fixed asset the firm revalued the developed land including construction thereon in order to bring it in line with the current market value to justify the business assistance secured by the firm from the banks to extent of nearly ₹ 250 crores. Therefore, on facts the tribunal concluded that the revaluation was not a colourable device. There was no withdrawal by the partners from capital accounts and therefore there cannot be any income liable to tax in their hands. - Decided in favour of assessee.
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