NAME OF THE CASE | DECISION | ISSUE INVOLVED | JUDICIAL AUTHORITY | DATE OF DECISION |
PCIT Vs Ansal Properties And Infrastructure Limited | IN FAVOUR OF THE ASSESSEE | 47(iv) Capital Gains Exemptions | High Court Delhi | 2023-03-29 |
CONCLUSIVE PART OF THE ABOVE CASE LAW
Delhi High Court upheld the ITAT order that exempted surplus arising from the transfer of a 'Trunk Infrastructure Asset' by a real estate company to its 100% Indian subsidiary from chargeability of capital gain.
Assessee, a real estate company, transferred 'Trunk Infrastructure' including roads to its Indian subsidiary for a surplus of Rs. 70.05 Cr during AY 2012-13 and claimed exemption under Section 47(iv) treating the transfer as capital in nature.
The Revenue denied the exemption and held that the transfer of infrastructural assets related to the business and the surplus pertains to assets employed in the business, thus not capital in nature.
CIT(A) dismissed Assessee’s appeal, but ITAT allowed it stating that the surplus generated could not be treated as income' under Section 47(iv).
Delhi HC observed that Section 47(iv) exempts the transfer of a capital asset by a company to its subsidiary if the parent company or its nominees hold the whole of the share capital of the subsidiary company, and the subsidiary company is an Indian company, which is fulfilled in this case.
HC rejected the Revenue's argument that ITAT transgressed its jurisdiction by deciding beyond the assessment order given that Assessee offered the surplus as income chargeable to tax, stating that every receipt is not an income chargeable to tax.
Delhi HC dismissed Revenue's appeal and held that no substantial question of law arises for consideration.
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