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Showing contexts for: section 47(xiii) in Utsav Cold Storage P Ltd., Jodhpur vs Ito, Jaipur on 11 June, 2018Matching Fragments
8. Further contentions of the ld. AR which are taken note of by the Coordinate Bench are contained at para 4.3 of its order which are reproduced as under:-
"4.3. It was thereafter contended by the ld. A/R for the assessee that the specific provisions of section 47(xiii) which prevail over the general provisions i.e. section 49(1)(iii)(a) of the Act and on the basis of the above said submission, it was submitted that the AO was wrong in applying the provisions of sec. 49(1)(iii)(a) to determine the cost of M/s Utsav Cold Storage Pvt. Ltd., Jaipur Vs. ITO, Jaipur acquisition. It was further submitted that even the ld. CIT (A) was wrong in applying the provisions of section 49(1)(iii)(e) as the said provision was not in existence at the time of transaction or during the assessment proceedings as the said provision was inserted by the Finance Act,2012. On the basis of the above said contention, the ld. A/R has submitted that the addition made by the authorities below on the basis of transfer of land was wrong. In fact, the assessee has suffered short term capital loss on account of sale of the assets and there is no short term capital gain to the assessee. In the alternative, it was submitted that provisions of section 234B & 234C should not be applied for payment of interest on the basis of retrospective amendment on account of non-payment of advance tax."
9. Thereafter, the Coordinate Bench has recorded its finding at para 4.5 and 5 of its order which are reproduced as under:-
"4.5. We have heard rival contentions and perused the material available on record. Before we deal with the factual aspects of the matter, it is necessary to reproduce section 47(xiii) and 49 for the purpose of clarity and reference.
Section 47 : Transactions not regarded as transfer Nothing contained in section 45 shall apply to the following transfers :-
5. Ground no. 3 relates to levy of interest under section 234B. Since we have dismissed the ground of the assessee relating to cost of acquisition on the basis of principles stated herein above i.e. cost of acquisition of the firm, therefore, levy of interest u/s 234B is rightly M/s Utsav Cold Storage Pvt. Ltd., Jaipur Vs. ITO, Jaipur confirmed by the ld. CIT (A). We find no infirmity in the order of ld. CIT (A). The same is hereby upheld."
10. The Coordinate Bench has referred to the provisions of section 47(xiii) and section 49 of the Act and has held that both the sections operate and work in different forum and there is no over-lapping of the section. It held that section 47(xiii) provides that the succession or migration of a firm to a company is not treated as transfer and the said section doesn't provide for cost of acquisition in the hands of the company where a firm is succeeded by a company. The said findings of the Coordinate Bench thus takes into account the general position of law regarding specific nature of transfer where a firm is succeeded by a company and not regarded as transfer for the purposes of chargeability of capital gains tax and also the general position of law governing the cost of acquisition in such situations as so defined in section 49 of the Act.
12. We find that the above findings of the Coordinate Bench have been rendered in the context of the provisions of section 49(1)(iii)(a) and not section 49(1)(iii)(e) as amended by the Finance Act, 2012 where clause (xiii) of section 47 was inserted w.r.e.f 1.4.1999. Further, the contentions of the assessee have also been understood in context of transfer as per clause (xiii) of section 47 as evident from the finding that "the assessee, in our view, has wrongly got confused with the principles laid down under section 47 which talks about the transaction which are not regarded as transfer, with that of principles for determining of cost of acquisition under section 49" instead of corresponding clause relating to cost of acquisition relating to transfer as contemplated under section 47(xiii) as introduced in section 49(1)(iii)(e) of the Act. However, if we look at the first two grounds of appeal, these grounds of appeal were raised by the assessee specifically in the context of section 49(1)(iii)(e) as amended by the Finance Act, 2012 which were brought on the statute subsequent to passing of the M/s Utsav Cold Storage Pvt. Ltd., Jaipur Vs. ITO, Jaipur assessment order u/s 143(3) of the Act and which were invoked by the ld CIT(A). In these grounds of appeal, the assessee has challenged the findings of the ld CIT(A) in holding that amendment to section 49(1)(iii)(e) inserting clause (xiii) of section 47 was clarificatory in nature. The said findings of the ld CIT(A), as we have noted above, were rendered in the context of amendment being retrospective and hence clarificatory in nature. However, the way the same has been apparently understood by the Coordinate Bench was that the provisions governing cost of acquisition in case of succession, inheritance are already in existence under section 49(1)(iii)(a), the subsequent amendment in section 49(1)(iii)(e), wherein corresponding provisions governing cost of acquisition in case of a transfer as defined in section 47(xiii) were provided by the Finance Act, 2012, was clarificatory in nature.