Section 45(3) vs.. Sec 50C of The Income Tax Act

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Pushkraj Sathe (Querist)
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15 November 2007 Where a partner brings in his land and building into partnership as his capital contribution,which section would be attracted 45(3) or 50C ? Why ?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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15 November 2007 In the cases of transfer of land and/or buildings covred by 50C, the full value of the consideration received or accruing for computation u/s 48 gets substituted by the value adopted by stamp valuation authority.

In the case of transfer, by a person, of any of his capital asset to a firm in which he becomes a partner as contemplated u/s 45(3) the value recorded in the books of account will be treated as full value consideration received or accruing u/s 48.

In my opinion, the above said general provison u/s 45(3)in the case of all capital assets, is over-ridden by 50C stipulation in the case of any form of transfer of land and/or buildings and therefore that will prevail over 45(3).

S.Srinivasaraghavan

Pushkraj Sathe

Pushkraj Sathe (Querist)
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15 November 2007 Dear Mr.Srinivasaraghavan,
Logically your opinion is acceptable.Do you have any case law in support of this,? if you have it please let me know .Thanks for the reply

vishal

vishal (Expert)
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15 November 2007 Hi Pushkraj

I am agreed with the opinion of Above expert due to the reason that sec 45 (3) is a general prov. for such situation and sec 50 c is specific provision

thanx

Pushkraj Sathe

Pushkraj Sathe (Querist)
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16 November 2007 Dear Vishal,
Thanks for the considered reply on my both the queries that is this one and the one on Section 45(3)vs..50C.Both the replies are expert advice.
Thanks once again.Bye.
Pushkraj

Amarjeet Singh

Amarjeet Singh (Expert)
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16 November 2007 Section 50C is independent of section 45(3) ,which gives the power to AO to assesss the sale consideration .If amount booked in the books of firm is less than the sale consideration calculated as per section 50C ,then it will be the sale consideration for the purpose of computation of capital gain u/s 48.

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