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TMI Blog2024 (12) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... on received property consequent to liquidation of the company, the period of holding of asset has to be taken from the date of previous owner i.e., company held it. We agree with the contention of the assessee as the Explanation to Section 2(42A) of the Act is very clear and hence, we confirm the order of CIT(A). This issue of Revenue s appeal is dismissed. Applicability of provisions of Section 50C - A look at the provisions of section 50C of the Act shows that the same applies to a consideration received or accruing as a result of the transfer by an assessee of a capital asset. In the present case, the appellant has not received any consideration as a result of the transfer by him ie. the appellant has not transferred any capital asset. Rather, the appellant has received an assets of a company are distributed to its shareholders on its liquidation in the form of land at Seevaram which is not be a transfer by the company for the purposes of section 45 as per the provisions of section 46(1) of the Act - Thus provisions of section 50C of the Act are not applicable in the case of the appellant for the Seevaram land received on distribution of asset on liquidation of company. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deed dated 10.12.2012. The AO during the course of assessment proceedings noted that the assessee in view of the provisions of section 46(2) of the Act sought long term capital gain for this transfer in his hand in assessment year 2013-14. But noted that the assessee received this property by way of release deed dated 10.12.2012 i.e., in financial year 2012-13 but sold this land to third parties on several dates i.e., falling from 25.04.2013 to 02.06.2013. The assessee claimed this land as long term capital asset but the AO treated the same as short term capital asset. The AO by going through the provisions of section 2(47) of the Act noted that the property received by assessee on liquidation of company is transferred within the provisions of section 2(47) of the Act and the provisions of section 46(2) of the Act. The AO treated this holding period by the assessee from 10.12.2012 i.e., the date of release deed by the company to the assessee and sold these lands on several dates starting from 25.04.2013 to 06.08.2013. The AO treated this land as short term capital gain because it is sold within one year. Aggrieved, assessee preferred appeal before CIT(A). 4. The CIT(A) after consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that the income earned on sale of Thiruvottiyur is required to be considered as Long term Capital Gain and the AO is therefore directed to tax the income earned so earned accordingly. Therefore, ground 1(i), 2,3, 4, 5 are allowed. Aggrieved, now Revenue is in appeal before us. 5. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the assessee was holding 368 equity shares in the Carbon Industries Pvt. Ltd., which got liquidated. The company was owning lands at Thiruvottiyur Main Raod, Tondiarpet, Chennai. On liquidation of this company, the assessee by way of release deed dated 10.12.2012 received property i.e., lands at Thiruvottiyur High Road. Admittedly, the assessee i.e., 360 equity shares were held by assessee for last so many years. The assessee along with other shareholders sold his share of property at Thiruvottiyur High Road and received sale consideration on various dates falling during the period 25.04.2013 to 06.08.2013. Before us, the ld.counsel for the assessee argued that the Explanation 1 to Section 2(42A) of the Act clearly explains that in the case of assets acquired in the distribution of assets of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO during the course of assessment proceedings noticed from perusal of release deed dated 10.05.2013 that the value taken by the assessee is Rs. 10,00,00,000/- as against the guideline value of the entire property at Rs. 29,46,83,400/-. The assessee claimed that he has not received any consideration pursuant to liquidation and there is no transfer and hence, there cannot be any application of provisions of section 50C of the Act for the present case. The assessee claimed that the assessee has received land upon liquidation of his company and once liquidation of company happens and consequent devolution of asset on the parties, it cannot be considered as transfer. But the AO was of the view that when the assets of the company are distributed on liquidation amongst its shareholders on extinguishment of rights in shares, transfer happens. The AO noted the provisions of section 46 of the Act, which does not say when the assets of the company are distributed amongst its shareholders, no transfer happen. Hence, the AO treated the same as transfer and referred the matter u/s.50C of the Act and taken the stamp duty valuation of the shares i.e., guideline value and computed long term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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