Delhi High Court - Orders
The Pr. Commissioner Of Income Tax -3 vs Escorts Heart Institute And Research ... on 21 March, 2024
Author: Yashwant Varma
Bench: Yashwant Varma, Purushaindra Kumar Kaurav
$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 1023/2019
THE PR. COMMISSIONER OF INCOME TAX -3
..... Appellant
Through: Mr. Aseem Chawla, Sr.SC with
Ms. Pratishtha Chaudhary and
Mr. Aditya Gupta, Advs.
versus
ESCORTS HEART INSTITUTE AND RESEARCH CENTRE
..... Respondent
Through: Mr. Simran Mehta, Adv.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR
KAURAV
ORDER
% 21.03.2024
1. This appeal has been preferred against the judgment rendered by the Income Tax Appellate Tribunal ["ITAT"] dated 11 June 2019 and proposes the following questions of law for our consideration: -
"2.1 Whether on the facts and in the circumstances of the case and in law, Id. ITAT has erred in deleting addition of Rs.1,44,34,72,911/- on account of Capital gains on account of Capital Gain on transfer of assets on conversion of the assessee into a limited company?
2.2 Whether on the facts and in the circumstances of the case and in law, Id. ITAT has erred in not treating the movement of assets from assessee society to a limited company on conversion of assessee society into limited company, as transfer of asset as per provision of section 2(47) read with section 45(1) of the Act?"
2. We note that by way of a detailed order dated 18 July 2023, we had flagged the principal question which would appear to arise. The This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/03/2024 at 03:52:37 question itself pertains to a society being registered under Part IX of the Companies Act, 1956 and whether the same would entail capital gains and transfer of assets.
3. The ITAT has taken the position that the aforesaid question would stand covered in light of the judgment rendered by the Bombay High Court in Commissioner of Income-tax vs. Texspin Engg. & Mfg. Works [(2003) 263 ITR 345]. We, however, note that Texspin was a case pertaining to a partnership firm as opposed to a society.
4. We consequently admit the instant appeal on the following questions of law: -
A. Whether on the facts and in the circumstances of the case and in law, ITAT has erred in deleting addition of INR 1,44,34,72,911/- on account of Capital gains on account of Capital Gain on transfer of assets on conversion of the assessee into a limited company?
B. Whether on the facts and in the circumstances of the case and in law, ITAT has erred in not treating the movement of assets from assessee society to a limited company on conversion of assessee society into limited company, as transfer of asset as per provision of Section 2(47) read with Section 45(1) of the Income Tax Act, 1961?
5. List again on 22.07.2024.
YASHWANT VARMA, J.
PURUSHAINDRA KUMAR KAURAV, J.
MARCH 21, 2024/neha This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/03/2024 at 03:52:37