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2015 (6) TMI 672 - AT - Income TaxAddition on capital gain - invocation of provisions of section 50C - Held that:- From a careful perusal of the joint venture agreement, we find that it is abundantly clear from this agreement that there is no absolute transfer of land by the first party i.e. Methodist Church in India in favour of M/s Ritam Charitable & Education Society. Basically, it is joint venture agreement executed between the Methodist Church in India and M/s Ritam Charitable & Education Society to expand the hospital facilities and also to set up a medical college in the field of medicine. Since the first party has provided the land and immovable property owned by it to the second party for the development of the project, one time payment of ₹ 10 crore was made to second party. This one time payment will be called to be the consideration for surrendering certain rights in the immovable property by the first party i.e. Methodist Church in India in favour of M/s Ritam Charitable & Education Society for which if any capital gain is to be accrued, it would be accrued only in the hands of Methodist Church in India. The assessee is nowhere a party to the joint venture agreement. It was simply a hospital managing the affairs of the hospital only. It did not own the property of the hospital including the land therein as per its constitution as it was owned by Methodist Church in India. Therefore, from any angle, if the joint venture agreement and constitution of Clara Swain Hospital is seen, it would be abundantly clear that assessee has not transferred any land or any right in the capital asset in favour of M/s Ritam Charitable & Education Society. Moreover, onetime payment of ₹ 10 crore was also not made to the assessee. The payment was made to Methodist Church in India through DD issued in favour of Executive Board of Methodist Church in India. Since the assessee has not received any consideration in lieu of any transfer of the capital asset, there is no question of any capital gain in the hands of the assessee. Whatever capital gain has arisen, it is only in the hands of Methodist Church in India and not in the hands of the assessee. Therefore, we are of the view that the Revenue has wrongly assessed the capital gain in the hands of the assessee on transfer of any right in movable or immovable property or land in favour of the M/s Ritam Charitable & Education Society. So far issue of invocation of section 50C is concerned, we find that since the capital gain cannot be taxed in the hands of the assessee, the issue remains academic only and we therefore, decline to adjudicate the same. Accordingly, we set aside the order of CIT(A) and delete the additions of capital gain made in the hands of the assessee. - Decided in favour of assessee
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