Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

Deputy Commissioner of Income-tax 24 (3) , Mumbai Versus M/s. S.C. Brothers

Transfer of the property by way of distribution of assets on retirement of two partners - LTCG or STCG - assessee contended that what has been transferred to the retiring partner is 50% of the FSI retained by the assessee firm which would naturally result into a LTCG to the firm - Held that:- What was available with the assessee after transfer of land under DA is only 50% of the land along with FSI available on the said 50% of the land. Accordingly, we find that the AO was not justified in consi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ong term capital asset and the gain arising there-from it will be a LTCG. Thus, the Hon’ble High Court has held that if there is a construction on the land which is a depreciable asset then the land and building has to be bifurcated and the super structure has to be treated as STCG and the land will be treated as LTCG. Similar view has been taken in the case of Hindustan Hotel Ltd. (2010 (10) TMI 16 - Bombay High Court). Accordingly, in view of the above facts and circumstances as well as the ju .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The Respondent : Dr.K.Shivaram & Ms.Neelam C.Jadhav ORDER Per VIJAY PAL RAO, JM: This appeal by the revenue is directed against the order dated 28/01/2011 of the CIT(A)-34, Mumbai, for the assessment year 2007-08. 2. The revenue has raised the following grounds: 1. "On the facts & in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the Assessing Officer to treat the income, from transfer of the property by way of distribution of assets on retirement of two .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y under transfer, without considering the clause of supplementary agreement between the assessee and M/s K.Raheja Universal Pvt. Ltd. which clearly states that the owners have been allotted one of the two units on the ground floor and entire 1st, 2nd and 3rd floors of the new building constituting 50% of total super built up area. Further, in the development agreement also it is mentioned that the developer shall construct and hand over to the owners, free of cost commercial units having 50% of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ement dated 28/11/2005 with M/s.K.Raheja Universal Pvt. Ltd., for development of the said land. As per the terms of Development Agreement (DA), assessee was entitled to receive 50% of the developed property + ₹ 4.80 crores. The said DA was registered with the stamp authority which valued the same at ₹ 10,62,50,000/- for the purpose of stamp duty. The assessee offered capital gains for tax on the said amount of ₹ 10,62,50,000/- after deducting indexed cost of 50% of land for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t sharing ratio in the property of the firm i.e. land and FSI present as well as future. Accordingly, the firm gave 50% of land and FSI and right to get the developed property from M/s.K.Raheja Universal Pvt. Ltd., to the retiring partners. Thus as per the provisions of sec.45(2), assessee offered long-term capital gains (LTCG) to tax on account of distribution of asset to retiring partners by considering 50% of the land and FSI as well as 50% share in the developed property to be received from .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n appeal before the CIT(A) and contended that vide DA dated 28/11/2005, the assessee transferred 50% of the land for development against consideration. The said DA was valued by the stamp authority at ₹ 10,62,50,000/- which was offered to tax for the assessment year 2006-07. Therefore, the assessee remained with only 50% of the land along with FSI as well as right to receive 50% of the developed property from M/s.K.Raheja Universal Pvt. Ltd. under the DA. The AO, for the assessment year 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by way of distribution on retirement of partners is only the asset being 50% of the land along with FSI retained by the assessee-firm and the same is LTCG under section 45(4). The CIT(A) also allowed the indexation of cost of acquisition for the purpose of computing LTCG, as it was done by the AO in the earlier assessment year while accepting LTCG on transfer of land under the DA. Accordingly, he directed the AO to re-compute the capital gain by allowing indexation on the cost w.e.f. 1/4/1981. T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the land but only having right to receive the super built up area upon the land transferred to the developer M/s.K.Raheja Universal Pvt. Ltd., Thus, the learned DR has submitted that the asset remained with the assessee was only to receive the developed property which was rightly treated by the AO as STCG subsequent to the DA dated 28/11/2005. He has further contended that the AO has righty taken into account FSI on the entire land instead of 50% of the land. 6.1 On the other hand, the learned .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s further submitted that as far as the transfer of land vide DA dated 28/11/2005, the entire capital gain arising from the said transfer has already been offered to tax for the assessment year 2006-07 which was accepted by the AO while passing the assessment order under section 143(3) therefore, the said 50% of the land which was transferred to the developer cannot be considered as the asset of the assessee for the purpose of distribution to the retiring partner. The learned authorised represent .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e jurisdictional High Court in the case of CIT vs. Hindustan Hotels Ltd. (335 ITR 60) and CIT vs. Citibank (261 ITR 570) as well as the decision of this Tribunal in the case of ACIT vs. Jaimal K Shah (137 ITD 376)(Mum). Thus, the learned authorised representative of the assessee has submitted that only ½ portion of the land was retained by the assessee after the DA which is to be distributed to the retiring partners. The FSI has no value without the land on which construction is to be car .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

greed between the parties as per the DA was to received by the assessee partly in cash and partly in the shape of developed property, however, the assessee offered capital gains arising from the transfer of the land along with FSI under the DA on the basis of the full value consideration as per the stamp value at ₹ 10,62,50,000/-. We find that the AO, for the assessment year 2006-07 accepted the LTCG offered by the assessee arising from the DA dated 28/11/2005. After transfer of 50% of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Excise duty credit on finished stock at additional place of business.

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Forum: GST rates on mobile recharge business

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Forum: import purchase

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Forum: 3B mistake

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version