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2022 (9) TMI 1231 - AT - Income TaxAddition u/s 45(3) - assessee has contributed land as contribution towards capital in the partnership firm - determination of cost of acquisition - HELD THAT:- The purchase cost of the said part of the land was determined at Rs.3,43,12,394 as against the purchase cost computed by the assessee at Rs.4,60,75,840. The assessee contended that the Assessing Officer had not taken into consideration, the improvement cost accepted by the revenue determined from year to year in the past while computing the proportionate cost of the land. AO had not considered the relevant evidences and documents furnished at the time of assessment proceedings. In this regard, we direct the AO to follow the direction of the CIT(A) to verify the sum capitalised by the assessee and considered the correct cost of acquisition as accepted by the Revenue in the preceding years and recompute the capital gains accordingly. Therefore Ground of the assessee is allowed for statistical purposes. Applicability of provisions of section 45(3) or provision of section 50C of the Act in the case of the assessee - Section 45(3) is the specific provision which states that profit or gain arising from the transport of the capital asset by a person to a firm or other association of persons or body of individual (not being a company or a co-operative society) in which he becomes a partner or member by way of capital contribution shall be chargeable to tax as his income for the previous year for which such transfer takes place. For the purpose of section 48, the amount recorded in the books of accounts of the firm as capital asset shall be deemed to be full value of consideration received or accrued as a result of the transfer of capital assets. Hon’ble Supreme Court in the case of Pr. CIT Vs. Dr. Ramamurthy (2018 (9) TMI 1102 - SC ORDER) held that for the purpose of computing capital gain u/s.45(3) of the Act, value of assets recorded in the books of account of a firm on date of transfer would be deemed to be full value of consideration received or accrued as a result of transfer. In the case of DCIT Vs. Amartara Pvt. Ltd. [2020 (4) TMI 222 - ITAT MUMBAI] it is held that profit or gains arising from the transfer of capital asset by a partner to a firm in which he become a partner by way of capital contribution, then for the purpose of section 48, the amount recorded in the books of accounts of the firm shall be deemed to be full value of consideration received or accrued as a result of transfer of capital asset. - Decided in favour of assessee.
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