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2023 (8) TMI 1186 - ITAT AHMEDABADAddition u/s 50C v/s 45(3) - Capital contribution in the partnership firm by way of transfer of Land (capital assets) by the partner - HELD THAT:- As provision of section 50C(1) of the Act is general provision in the given facts and circumstances whereas the provision of section 45(3) is specific provision dealing with the specific transfer of capital assets by the partner to partnership firm by way capital contribution. It is the accepted rule of construction that special provisions would prevail over general provisions as per the famous latin maxim "Generalia Specialibus Non Derogant". When two conflicting provisions of law operate in the same field, the provision that specifically operates in that field would apply over the general rule. In holding so we draw support and guidance from the judgment of State of Rajasthan v. GopiKishan Sen [1992 (4) TMI 242 - SUPREME COURT] In the case on hand, the present assessee is a partner in a firm namely M/s Pooja Buildcon and transfers land property to such partnership firm by way of capital contribution. This is a specific transaction between partnership and partner for which there is special provision enacted by the legislator vide section 45(3) of the Act. Therefore, in our considered view the consideration in the hand of the partner (present assessee) shall be determined as per the provision of section 45(3) of the Act and not as per the provisions of section 50C. Disallowance of indexed cost of improvement from the computation of capital gain - assessee against the sale of land and transfer of land to partnership firm claimed certain amount incurred in different years as cost of improvement which includes interest paid to one Shri Suresh Patel in different years and compensation paid in lieu of cancellation deed executed by the impugned party and parties from whom the assessee purchased the impugned land property - HELD THAT:- We find that the lower authority failed to point out any infirmity in the evidence made available by the assessee but rejected the claim of the assessee merely on the reasoning that the cancellation deed did not contain the detail of payment and party has not offered income on receipt of such compensation. In our considered opinion, the reasons assigned by the AO and by the learned CIT(A) to reject the claim of the assessee is not justified especially considering the documentary evidence made available by the assessee qualifying the payment of compensation. As considering the elaborated factual and legal position, we hereby set aside finding of learned CIT(A) regarding the claim of cost of improvement on account of compensation paid to “Om Shri Sanat Non-Trading Owners Association” and direct the AO to allow the claim of the assessee in this regard. Hence, in totality the claim of the assessee on the issue raised by him vide impugned grounds of appeal are hereby partly allowed for statistical purposes.
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