Case Law Details
ITO Vs Kapurba and Company (ITAT Pune)
Introduction: The case of ITO vs. Kapurba and Company, decided by ITAT Pune, involves an appeal against the order passed by the Commissioner of Income Tax (Appeals)-7, Pune for the assessment year 2012-13. The central issue pertains to the applicability of Section 2(47) of the Income Tax Act.
Detailed Analysis: Kapurba and Company, a firm engaged in land purchase and sale, filed its return of income declaring a total income of Rs. 10,16,327. The case was selected for scrutiny, with the Assessing Officer (AO) concluding that the firm had transferred its capital asset, a piece of land, to Bluestar Infra Housing Private Limited.
The AO argued that the agreement of sale and the irrevocable power of attorney executed by Kapurba and Company indicated that they had relinquished their rights over the land. The market value of the land was considered to be Rs. 30,74,93,500 for stamp duty purposes.
The AO initiated proceedings under Section 2(47) of the Income Tax Act, and capital gains amounting to Rs. 30,69,57,165 were added to the total income of the assessee.
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