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2023 (5) TMI 407 - AT - Income TaxCapital gain on sale of land - transfer of stock in trade as capital contribution by the assessee - assessee (HUF) had introduced his share of land as capital contribution in the AOP - capital asset u/s 2(14) - AO stated that the land was not transferred and it was merely given for development, hence, there was no transfer as envisaged in section 2(47) - HELD THAT:- In the case under consideration, the assessee contributed his land as Capital in the AOP. The assessee is liable to receive share of profit of AOP as mentioned in the Article 11 of the “Articles of Agreement” vide which the AOP was formed. Therefore, the facts of the present case are identical to the facts of the case of DLF Universal Ltd [2010 (1) TMI 54 - ITAT DELHI-B]. Therefore, as held that the land which was introduced as Capital by the assessee in the AOP and has been duly credited to his capital account of AOP, partakes the character of Capital Assets. Thus provisions of Section 45(3) are applicable in the case of the assessee. Section 45(3) is a deeming provision. As relying on case of DLF Universal Ltd.[supra] we hold that the transaction of impugned land introduced by the assessee as his share of capital in the AOP is taxable u/s.45(3) of the Act. The AO shall consider the value of Rs.5,00,00,000/- which is credited in the books of accounts, as value of land shall be deemed to be the full value of consideration as a result of transfer of land as provided in Section 45(3) of the Act. The AO shall accordingly calculate the Capital gain.
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