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2022 (10) TMI 347 - AT - Income TaxCapital gain - land introduced in the firm and the same is accounted as capital and other liability of the partner of the firm - grievance of the revenue is that the assessee has introduced the land in the firm books at price more than DLC rate value and thereby the same is accounted as capital contribution as well as other liability and thereby the value is created much more than the DLC rate in the books of the firm - HELD THAT:- As we have not been the satisfactory proof whether the impugned land was an agricultural land or not? If the land is considered as nonagricultural land than the same is not accounted as capital assets in the firm’s books. Whether the excess amount accounted in the books are chargeable in accordance with the provision of section 28(iv) is also not considered by the AO by passing a speaking order while making the addition in this case. All these issues require an examination of facts of the impugned land for which we believe that the opportunity is required to be given in the interest of justice to both the parties to take into consideration their respective arguments for which is necessary records to show the land was agricultural land or non-agricultural land is not clear before us. Assessee not placed on records in rebuttal of the arguments of this argument. Moreover, the arguments of the ld. DR on the provision of section 45(3) read with section 2(14) is also not examined in the absence of the evidence on record. As section 2(14) specific exclude the capital assets being agricultural land whereas section 45(3) deals with the capital assets and ld. CIT(A) have not examined this issue even though the issue was before him and it is appearing in his order. Thus, when agricultural land introduced in the firm under section 45(3) is not in capital asset then how the benefit of section 45(3) can be given to the assessee firm, there is no clear finding in the assessment order whether the land is agricultural land or not and therefore Assessing Officer is directed examine this aspect afresh and decide as to whether in the year of the transfer the land was agricultural land and thereby examine the applicability of the provision of and decided the issue after giving property opportunity to the assessee. In terms of these observation the appeal filed by the revenue is allowed for statistical purpose.
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