Case Law Details
DCIT Vs Avantha Realty Ltd (ITAT Delhi)
ITAT Delhi held that in view of provision of 47(v) of the Act the transaction of transfer of land from subsidiary to holding company is not covered u/s. 45 of the Act. Accordingly, when the transaction does not falls within ambit of section 45, then any claim of long term capital loss/profit cannot be allowed.
Facts- The assessee mainly contested that the CIT(A) has grossly erred in confirming the action of AO in disallowing long term capital loss of IN 3,74,14,984 in the assessment order for the relevant assessment year incurred on account of transfer of land to Ballarpur Industries Limited.
Assessee contested that CIT(A) grossly erred in confirming the said action of AO on an incorrect basis that the land under consideration was sold by assessee to its holding company, viz., Ballarpur Industries Limited, without appreciating that M/s Ballarpur Industries Limited is not the holding company of assessee, as has been accepted by the assessing officer as well in the assessment order for the relevant assessment year and the provisions of section 47(v) of the Income-tax Act, 1961 were not applicable in the present matter.
Conclusion- Held that the ld. CIT(A) dismissed the claim of assessee of long term capital loss by observing that the transfer of capital asset by appellant company to its parent/holding company (in which appellant company is 100% subsidiary of its parent company i.e. BILT) therefore in view of provision of 47(v) of the Act the transaction of transfer of land from subsidiary to holding company is not covered u/s. 45 of the Act. We are in complete agreement with the findings arrived by the ld. CIT(A) based on section 47(v) of the Act and when the transaction does not falls within ambit of section 45 of the Act then any claim of long term capital loss/profit cannot be held as allowable.
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