TMI Blog2020 (4) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the transfer of a capital asset by a partner to a firm in which he is or becomes a partner by way of capital contribution, then for the purpose of section 48, the amount recorded in the books of account of the firm shall be deemed to be full value of consideration received or accruing as a result of transfer of a capital asset. AO cannot import another deeming fiction created for the purpose of determination of full value of consideration as a result of transfer of a capital asset by importing the provisions of section 50C. Therefore, we reverse the finding of the CIT(A) and delete the addition made towards recomputation of long term capital gain on account of transfer of capital asset into partnership firm.- Decided against revenue Depreciation of block of assets, building as claimed by the assessee prevailing over the provisions of section 45 over the provision of section 50C - HELD THAT:- As ground 1 is decided in favour of the assessee consequentially provisions of 45(3) would prevail over the provisions of section 50C. Hence, ground 5 becomes infructurous and the value as deducted from the block of asset by the appellant holds true along with the depreciation claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the submissions made by the assessee, the A.O. worked out the LTCG amounting to ₹ 28,09,992/- as against LTC loss computed by the assessee at Rs.(4,49,22,008)/-. 7. On similar reasoning, by substituting the value as per the provision of section 50C, the A.O. made the addition of ₹ 96,31,700/- as against the long term capital gain computed by the assessee at ₹ 5,94,57,338/- for A.Y. 2014-15. 8. Upon the assessee s appeal, in indicial year, the ld. CIT(A) referred to the order of the ITAT in assessee s own case and decided the issue in favour of the assessee by holding as under: 6.1.3 I have considered the submissions made by Appellant and the material available on record. The Hon'ble Mumbai Bench of the ITAT in Appellant's own case in ITA No.6050/M/2016 for assessment year 2012-13 vide Order dated 29.12.2017 has held as follow:- Having heard both the sides, we find merit in the argument of the assessee for the reason that the provisions of section 45(3) deals with special cases of transfer of capital asset where the profits or gains arising from the transfer of capital asset by way of capital contribution or otherwise shall be chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 50C of the Act, The CIT(A), without appreciating the facts, simply upheld addition made by the AO by following the decision of ITAT, Lucknow Bench in the case of ACIT vs. Carlton Hotel Pvt. Ltd (supra) where the ITAT has simply observed that the provisions of section overrides the provisions of section 45(3) but not given a categorical finding. The ITAT has given its findings under different facts considering the fact that when a document is registered under the Provisions of Registration Act 1903, the value determined by the stamp duty authority shall be replaced to determine full value of consideration, Therefore, we reverse the finding of the CIT(A) mid delete the addition made towards computation of long terms capital gain on account of transfer of capital asset into partnership firm. In the result, appeal filed by the assessee's is allowed 6.1.4. The Hon'ble Tribunal has accordingly held that the deeming section provided in Section 50C cannot be extended to another deeming section created by the statue by Section 45(3). The Tribunal has noted that since the Act itself has provided for deeming consideration to be adopted for the purpose of Section 48 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50C of the Act. 13. Brief facts of the case on this issue is that the A.O. on this issue has held that the financial statements that deprecation of ₹ 59,15,637/- has been claimed @ 10% against the block of assets Building after reducing ₹ 78,07,500/- from the block on account of sale of the aforesaid factory building. As discussed in para 5.6 above, the deemed value of the building has been increased by ₹ 42,83,038/-. Therefore, the A.O. opined that the deprecation claimed by the assessee on Building will be restricted by 10% of the same, i.e., ₹ 4,28,304/- and depreciation of ₹ 54,87,333/- will be allowed (59,15,637 4,28,304). He further held that the book profit will also be increased by the sum of ₹ 4,28,304/-. 14. We note that the ld. CIT(A) has dealt with the issue as under: 6.2.2 In para 6 of the assessment order, the ld. A.O. has mentioned that depreciation of ₹ 59,15,637/- has been claimed after reducing ₹ 78,07,500/- from the block of asset. But as the deemed value of building has been increased by ₹ 42,83,038/- the depreciation is restricted to ₹ 54,87,333/-. 6.2.3 The Appellant submits that re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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