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2022 (2) TMI 861 - AT - Income TaxRevision u/s 263 by CIT - Wrong Capital gain computation as AO not examined the transaction by the angle of section 50C - asset which was contributed as a capital contribution by a partners to a firm where he is a partner - scope of provision of section 45(3) and 50C of the Act are separate and independent and capital gain is to be determined in accordance with the provision of section 50C of the Act as has been clearly held by ld. PCIT while exercising his power under section 263 of the Act issued show cause notice to the assessee - HELD THAT:- No doubt that the transaction of capital contribution was examined by the AO. However, it is a matter of fact that there is no reference in the assessment order about the examination of issue. As recorded above that Hon’ble Jurisdictional High Court in case of Nirma Chemical works [2008 (2) TMI 373 - GUJARAT HIGH COURT] held that when assessing officer after making due inquiries had adopted one of the view and granted partial relief, merely because Commissioner took a different view of the matter, it would not be sufficient to permit Commissioner to exercise his powers under section 263. The stand of the assessee before the AO as well as before the ld. PCIT is that the assessee has contributed three pieces of land as his contribution in the partnership firm, thus, keeping in view, the decision of Co-ordinate Bench in Sarrangan Ashok vs. ITO [2019 (8) TMI 1527 - ITAT CHENNAI] and Mumbai Bench in ACIT vs. Amartara (P) Ltd. [2020 (4) TMI 222 - ITAT MUMBAI] wherein it was held that where the partner transferred land as a capital contribution to its partnership firm and the transaction falls under the scope of section 45(3) of the Act, which itself is a deeming section, another deeming section prescribed in section 50C of the Act could not be extended to determine the value of consideration. Thus, in view of the aforesaid legal decisions, in our considered view the view taken by the AO in accepting the capital gain/loss on capital contribution of (03)three pieces of land is not erroneous. Therefore, the twin condition as enunciated under section 263 of the Act is not made out in the present case, thus, the order passed by the ld. PCIT is set-aside, accordingly, grounds of appeal raised by the assessee are allowed.
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