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2023 (10) TMI 620 - AT - Income TaxCapital gain - Land transfered by assessee into partnership firm - stock-in-trade is introduced into a firm - valuation of land was done by the assessee himself more as against the cost price and the same has not been revalued by the joint venture or the firm - HELD THAT:- The amount recorded in the books of the firm should be deemed to be the full value of contribution received or accrued as a result of such transfer. CIT (A) has given a finding that the assessee was following method of valuation of closing stock of its business at cost or market price, whichever is lower, as per settled and accepted principles of accountancy. Accordingly, the land in question as well as of other plots of land held by the assessee as stock-in-trade were used to be valued as per the method of valuation at the end of the year when accounts of the assessee were made out - in the current year under consideration, the assessee got the land in question revalued determining market value at Rs. 6.0 crores which is more than the cost to the assessee and the land was then contributed to the newly constituted partnership firm as capital contribution and the surplus of Rs. 4.80 crores arising from the said transaction was credited in the P&L Account of the assessee firm and the value of the land was credited in the capital account of the assessee partner in the books of the firm. Special Bench of the Tribunal in DLF Universal [2010 (1) TMI 54 - ITAT DELHI-B] held that the provisions of section 45(3) also applies when stock-in-trade is introduced into a firm because the transaction on the capital account and stock-in-trade does not retain its character as stock-in-trade at the point of time of introduction. No infirmity in the order of the learned CIT (A) confirming that there was a transfer resulting in capital gain for the year under consideration and thereby confirming the addition made by the assessee. Accordingly, the grounds of appeal 3 raised by the assessee is dismissed. Deduction u/s 80IB (10) - addition due to transfer of land in question - HELD THAT:- As deduction u/s 80IB(10) is applicable to an undertaking developing and building housing projects with certain conditions. However, in the instant case, the assessee is not an undertaking developing and building housing projects but is merely a partner in a joint venture/partnership firm. In our opinion, the deduction u/s 80IB(10), if any, can be claimed by the joint venture and not by the assessee who is merely a partner in the said partnership firm. Therefore, the additional ground raised by the assessee is dismissed.
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