Section 45(2) of the Income Tax Act

Income-tax Act, 2025: s.67

Section 45(2) falls under section 45 of the Income-tax Act, 1961, which corresponds to section 67 (Capital gains) of the Income-tax Act, 2025.

Read section 67 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 45(2) is CIT v. Mohanbhai Pamabhai (91 ITR 393), cited in 31 of the 238 judgments on BharatTax that turn on this section.

Leading authorities on Section 45(2)

CIT v. Mohanbhai Pamabhai
91 ITR 393 · 1973 · High Court
31
citing judgments

The distribution of capital assets to a partner upon the dissolution of a partnership firm does not constitute a 'transfer' and is therefore not taxable as capital gains.

Addl. CIT v. Mohanbhai Pamabhai
165 ITR 166 · 1987 · Supreme Court
26
citing judgments

When a partner retires from a partnership firm and receives consideration, including a proportionate share of goodwill, it is not considered a transfer for capital gains tax purposes.

CIT v. Dewas Cine Corporation
68 ITR 240 · 1968 · Supreme Court
12
citing judgments

The distribution, division, or allotment of assets of a firm to its partners upon dissolution is a mutual adjustment of rights and not a sale, exchange, or transfer of assets, thus not attracting capital gains tax.

Chalasani Venkateswara Rao v. ITO
349 ITR 423 · 2012 · High Court
10
citing judgments

Sums received by a partner on retirement, representing balances in their capital or current account, are not taxable as capital gains as they do not constitute a 'transfer' of interest in the firm's assets under Section 2(47) of the Income Tax Act.

Dr. (Smt.) Sujatha Ramesh v. CBDT
401 ITR 242 · 2018 · High Court
10
citing judgments

A delay in investing in Section 54EC bonds can be condoned, and the deduction shall not be disallowed, particularly when the bonds were unavailable in the market within the prescribed period from the date of transfer. The Assessing Officer is directed to verify the facts and allow the deduction under Section 54EC.

CIT 236 ITR 515 5) Prashant S. Joshi Vs. ITO 324 ITR 154 (Bom) 6) Chalasani Venkatsara Rao v. ITO
141 ITR 674 · 1983 · High Court
9
citing judgments
Joshi Vs. ITO 324 ITR 154 (Bom) 6) Chalasani Venkatsara Rao v. ITO
171 ITR 128 · 1988 · High Court
9
citing judgments
CIT v. Mansukh Dyeing and Printing Mills
145 Taxmann.com 151 · 2022 · Supreme Court
7
citing judgments
Tax V. Dynamic Enterprises (2013) 40 Taxmann.com 318 (Kar) (iii) Commissioner of Income Tax v. P.N.Panjavani
21 Taxmann.com 458 · 2012 · High Court
5
citing judgments
Karnataka Agro Chemicals (2014) 49 Taxmann.com 324 (Kar). (ii) Commissioner of Income Tax v. Dynamic Enterprises
40 Taxmann.com 318 · 2013 · High Court
4
citing judgments

Judgments on Section 45(2)

The DCIT, Central Circle-2, Vadodara vs. Shri Rajesh K. Thakkar, Baroda

In the result, the appeal filed by the Revenue in IT[ss]A 11

ITSSA 92/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad16 May 2024AY 2010-11
For Respondent: Shri Kamlesh Makwana, CIT-DR
Section 132Section 139Section 153ASection 2(47)(v)Section 45(2)Section 54E

The DCIT, Central Circle-2, Vadodara vs. Smt. Dakshaben A. Thakkar, Baroda

In the result, the appeal filed by the Revenue in IT[ss]A 11

ITSSA 91/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad16 May 2024AY 2010-11
For Respondent: Shri Kamlesh Makwana, CIT-DR
Section 132Section 139Section 153ASection 2(47)(v)Section 45(2)Section 54E

The DCIT, Central Circle-2, Vadodara vs. Shri Anil K. Thakkar, Baroda

In the result, the appeal filed by the Revenue in IT[ss]A 11

ITSSA 90/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad16 May 2024AY 2010-11
For Respondent: Shri Kamlesh Makwana, CIT-DR
Section 132Section 139Section 153ASection 2(47)(v)Section 45(2)Section 54E

M/S Dharani Developers Private Limited, Alwarpet, Chennai vs. ACIT, Company Circle 1(4), Nungambakkam Chennai

ITA 401/CHNY/2023[2017-18]Status: DisposedITAT Chennai18 Jan 2024AY 2017-18

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos.397, 398, 399, 400 & 401/Chny/2023 Assessment Years: 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18 M/S. Dharani Developers Private Vs. The Asst/Deputy Commissioner Of Limited, No. 1, Venus Colony Ii Street, Income Tax, Corporate Circle 1(1), Alwarpet, Chennai 600 018. 121, Mahatma Gandhi Road, [Pan:Aabcd6222D] Nungambakkam, Chennai 600 034. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri K. Ramakrishnan, Ca ""थ" की ओर से/Respondent By : Shri D. Hema Bhupal, Jcit सुनवाई की तारीख/ Date Of Hearing : 09.01.2024 घोषणा की तारीख /Date Of Pronouncement : 18.01.2024 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against Separate Orders Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, All Dated 31.01.2023 Relevant To The Assessment Years 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18. 2. Brief Facts Of The Case Are That The Assessee Is Engaged In The Business Of Property Development & Filed Its Return Of Income For The Assessment Years Under Appeal. The First Ground Raised By The Assessee

For Appellant: Shri K. Ramakrishnan, CAFor Respondent: Shri D. Hema Bhupal, JCIT

M/S Dharani Developers Private Limited, Alwarpet, Chennai vs. ACIT, Company Circle 1(4), Nungambakkam Chennai

ITA 400/CHNY/2023[2016-17]Status: DisposedITAT Chennai18 Jan 2024AY 2016-17

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos.397, 398, 399, 400 & 401/Chny/2023 Assessment Years: 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18 M/S. Dharani Developers Private Vs. The Asst/Deputy Commissioner Of Limited, No. 1, Venus Colony Ii Street, Income Tax, Corporate Circle 1(1), Alwarpet, Chennai 600 018. 121, Mahatma Gandhi Road, [Pan:Aabcd6222D] Nungambakkam, Chennai 600 034. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri K. Ramakrishnan, Ca ""थ" की ओर से/Respondent By : Shri D. Hema Bhupal, Jcit सुनवाई की तारीख/ Date Of Hearing : 09.01.2024 घोषणा की तारीख /Date Of Pronouncement : 18.01.2024 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against Separate Orders Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, All Dated 31.01.2023 Relevant To The Assessment Years 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18. 2. Brief Facts Of The Case Are That The Assessee Is Engaged In The Business Of Property Development & Filed Its Return Of Income For The Assessment Years Under Appeal. The First Ground Raised By The Assessee

For Appellant: Shri K. Ramakrishnan, CAFor Respondent: Shri D. Hema Bhupal, JCIT

M/S Dharani Developers Private Limited, Alwarpet, Chennai vs. ACIT, Company Circle 1(4), Nungambakkam Chennai

ITA 399/CHNY/2023[2013-14]Status: DisposedITAT Chennai18 Jan 2024AY 2013-14

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos.397, 398, 399, 400 & 401/Chny/2023 Assessment Years: 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18 M/S. Dharani Developers Private Vs. The Asst/Deputy Commissioner Of Limited, No. 1, Venus Colony Ii Street, Income Tax, Corporate Circle 1(1), Alwarpet, Chennai 600 018. 121, Mahatma Gandhi Road, [Pan:Aabcd6222D] Nungambakkam, Chennai 600 034. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri K. Ramakrishnan, Ca ""थ" की ओर से/Respondent By : Shri D. Hema Bhupal, Jcit सुनवाई की तारीख/ Date Of Hearing : 09.01.2024 घोषणा की तारीख /Date Of Pronouncement : 18.01.2024 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against Separate Orders Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, All Dated 31.01.2023 Relevant To The Assessment Years 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18. 2. Brief Facts Of The Case Are That The Assessee Is Engaged In The Business Of Property Development & Filed Its Return Of Income For The Assessment Years Under Appeal. The First Ground Raised By The Assessee

For Appellant: Shri K. Ramakrishnan, CAFor Respondent: Shri D. Hema Bhupal, JCIT

M/S Dharani Developers Private Limited, Alwarpet, Chennai vs. ACIT, Company Circle 1(4), Nungambakkam Chennai

ITA 398/CHNY/2023[2012-13]Status: DisposedITAT Chennai18 Jan 2024AY 2012-13

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos.397, 398, 399, 400 & 401/Chny/2023 Assessment Years: 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18 M/S. Dharani Developers Private Vs. The Asst/Deputy Commissioner Of Limited, No. 1, Venus Colony Ii Street, Income Tax, Corporate Circle 1(1), Alwarpet, Chennai 600 018. 121, Mahatma Gandhi Road, [Pan:Aabcd6222D] Nungambakkam, Chennai 600 034. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri K. Ramakrishnan, Ca ""थ" की ओर से/Respondent By : Shri D. Hema Bhupal, Jcit सुनवाई की तारीख/ Date Of Hearing : 09.01.2024 घोषणा की तारीख /Date Of Pronouncement : 18.01.2024 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against Separate Orders Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, All Dated 31.01.2023 Relevant To The Assessment Years 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18. 2. Brief Facts Of The Case Are That The Assessee Is Engaged In The Business Of Property Development & Filed Its Return Of Income For The Assessment Years Under Appeal. The First Ground Raised By The Assessee

For Appellant: Shri K. Ramakrishnan, CAFor Respondent: Shri D. Hema Bhupal, JCIT

M/S Dharani Developers Private Limited, Alwarpet, Chennai vs. ACIT, Company Circle 1(4), Nungambakkam Chennai

ITA 397/CHNY/2023[2008-2009]Status: DisposedITAT Chennai18 Jan 2024AY 2008-2009

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. Nos.397, 398, 399, 400 & 401/Chny/2023 Assessment Years: 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18 M/S. Dharani Developers Private Vs. The Asst/Deputy Commissioner Of Limited, No. 1, Venus Colony Ii Street, Income Tax, Corporate Circle 1(1), Alwarpet, Chennai 600 018. 121, Mahatma Gandhi Road, [Pan:Aabcd6222D] Nungambakkam, Chennai 600 034. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri K. Ramakrishnan, Ca ""थ" की ओर से/Respondent By : Shri D. Hema Bhupal, Jcit सुनवाई की तारीख/ Date Of Hearing : 09.01.2024 घोषणा की तारीख /Date Of Pronouncement : 18.01.2024 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against Separate Orders Of The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi, All Dated 31.01.2023 Relevant To The Assessment Years 2008-09, 2012-13, 2013-14, 2016-17 & 2017-18. 2. Brief Facts Of The Case Are That The Assessee Is Engaged In The Business Of Property Development & Filed Its Return Of Income For The Assessment Years Under Appeal. The First Ground Raised By The Assessee

For Appellant: Shri K. Ramakrishnan, CAFor Respondent: Shri D. Hema Bhupal, JCIT

Guruvendra Singh, Kota vs. Assistant Commissioner of Income Tax Circle-1, Kota

In the result, appeal of the assessee is allowed

ITA 144/JPR/2023[2016-17]Status: DisposedITAT Jaipur07 Dec 2023AY 2016-17

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Rohan Sogani (CA)For Respondent: Sh. A. S. Nehra (Addl. CIT) a
Section 142(1)Section 143(2)Section 143(3)Section 548Section 54B

Shantha Natarajan, Hyderabad vs. Dy. Commissioner of Income Tax, Central Circle-2(4), Hyderabad

In the result, appeal filed by the assessee is allowed

ITA 2044/HYD/2017[2009-10]Status: HeardITAT Hyderabad29 Nov 2023AY 2009-10

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumarassessment Year: 2009-10 Smt. Shantha Natarajan Vs. Dy. C. I. T. Hyderabad Central Circle 2(4) Pan:Afbpn0481N Hyderabad (Appellant) (Respondent) Assessee By: Shri K.C. Devdas, Ca Revenue By: Shri Shakeer Ahmed,Dr

For Appellant: Shri K.C. Devdas, CAFor Respondent: Shri Shakeer Ahmed,DR
Section 132Section 143(2)Section 153ASection 45(2)

Sanjay Amrutrao Satav HUF, Pune vs. Income Tax Officer, Ward-12(4), Pune

In the result, the appeal filed by the assessee stands allowed

ITA 570/PUN/2023[2016-17]Status: DisposedITAT Pune26 Sept 2023AY 2016-17
For Appellant: Shri Hemant ShahFor Respondent: Shri M. G. Jasnani
Section 143(3)Section 45(2)

Dy. Commissioner of Income Tax, Circle-16(2), Hyderabad vs. Venkataramana Reddy Katpalli, Hyderabad

In the result, appeal of the Revenue is dismissed

ITA 1799/HYD/2019[2016-17]Status: DisposedITAT Hyderabad24 Aug 2023AY 2016-17

Bench: Shri Rama Kanta Panda & Shri K. Narasimha Charyआ.अपी.सं / Ita No. 1799/Hyd/2019 (निर्धारण वर्ष / Assessment Year: 2016-17) Assistant Commissioner Vs. Sri Venkataramana Reddy Of Income Tax, Katpalli, Circle-5(1), Hyderabad Hyderabad [Pan No. Adopk7258H] अपीलार्थीर्थी / Appellant प्रत्‍यर्थी / Respondent

For Appellant: Shri S. Rama Rao, ARFor Respondent: Ms. Sheetal Sarin, DR
Section 45(2)Section 54F

Lat Smt. Saroj Bansal, Dehradun vs. ITO, Ward-2(3), Dehradun

In the result, the appeal is allowed for statistical purposes

ITA 3941/DEL/2018[2013-14]Status: DisposedITAT Dehradun23 Jun 2023AY 2013-14
Section 147Section 54F

Girdharbhai Haribhai Gajera, Surat vs. ITO(International Taxation), Surat

In the result, additional grounds raised by the assessee is allowed

ITA 143/SRT/2019[2015-16]Status: DisposedITAT Surat22 Feb 2023AY 2015-16

Bench: Shri Pawan Singh, Jm &Dr. A.L.Saini, Am आयकर अपील सं./Ita No.143/Srt/2019 (िनधा"रणवष" / Assessment Year: (2015-16) (Physical Court Hearing) Girdharbhai Haribhai Gajera Income Tax Officer 1,Vrushal Nagar, Opp. (International Taxation), 107, 1St Vs. Ktargam Police Station, Floor, Anavil Business Centre, Katargam Road, Surat-35004 Adajan-Hazira Road, Opp. Star Bazar, Adajan, Surat-395009 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Abepg 7339 M (Assessee ) (Respondent)

For Appellant: Shri Hiren R.Vepari, C.AFor Respondent: Shri Vinod Kumar, Sr-D.R
Section 142(1)Section 143(2)Section 143(3)Section 2(14)Section 271Section 45(2)

Maddimisetti Srinivasu, Tanuku vs. The Asst . Commissioner of Income Tax, Circle-1, Rajahmundary

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 96/VIZ/2022[2017-2018]Status: DisposedITAT Visakhapatnam31 Jan 2023AY 2017-2018

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./I.T.A.No.96/Viz/2022 (ननधधारण वर्ा / Assessment Year : 2017-18) Maddimsetti Srinivasu Vs. Asst.Commissioner Of D.No.1-77, Peddintlamma Street Income Tax Tanuku Mandal Circle-1 Komaravaram Rajahmundry [Pan : Ctxpm3066Q]

For Appellant: Shri G.V.N.Hari, ARFor Respondent: Shri M.N.Murthy Naik, CIT(DR)
Section 142(1)Section 143(3)Section 263Section 45(2)Section 48Section 54F

Shrijee Developers Limited, Chennai vs. ITO Ward 6(1), Chennai

In the result, appeal filed by the assessee is dismissed

ITA 2065/CHNY/2018[2003-04]Status: DisposedITAT Chennai11 Jan 2023AY 2003-04

Bench: Shri Mahavir Singh, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita No.2065/Chny/2018 िनधा"रण वष" /Assessment Year: 2003-04 V. M/S.Shrijee Developers Ltd., The Income Tax Officer, No.12, Padmavathiar Road, Ward-6(1), Gopalapuram, Chennai-600 086. Chennai. [Pan: Aabcs 0196 H] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से/ Appellant By : Mr.S. Sridhar, Adv. ""थ" की ओर से /Respondent By : Mr. Ar.V.Sreenivasan, Addl.Cit सुनवाई की तारीख/Date Of Hearing : 05.01.2023 घोषणा की तारीख /Date Of Pronouncement : 11.01.2023

For Appellant: Mr.S. Sridhar, AdvFor Respondent: Mr. AR.V.Sreenivasan

ACIT, Cuddalore Circle, Cuddalore vs. Sarojini B Nair, Vridhachalam

ITA 314/CHNY/2019[2015-16]Status: DisposedITAT Chennai23 Dec 2022AY 2015-16

Bench: Shri V. Durga Rao, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita No.314/Chny/2019 िनधा"रण वष" /Assessment Year: 2015-16 The Asst. Commissioner- V. Smt. Sarojini B. Nair, Of Income Tax, No.1, Salem Road, Cuddalore Circle, Vridhachalam. Cuddalore. [Pan: Aavps 9240 B] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr.V.Meenakshi Sundar, CA &For Respondent: Mr. AR.V.Sreenivasan
Section 2(47)Section 43CSection 45(2)Section 47

Jagannath Krishnaji Deore, Pune vs. DCIT, Circle-2, Pune

Appeal is partly allowed in above terms

ITA 2091/PUN/2019[2012-13]Status: DisposedITAT Pune07 Dec 2022AY 2012-13

Bench: Shri S.S.Godara & G.D.Padmahshaliआयकरअपीलसं. / Ita No.2091/Pun/2019 िनधा"रणवष" / Assessment Year: 2012-13

Section 142ASection 143(3)Section 45(2)Section 50C

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 544/BANG/2021[2016-17]Status: DisposedITAT Bangalore07 Nov 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R
Section 131Section 132(4)Section 153CSection 45(2)

Assistant Commissioner of Income Tax, Central Circel-2(1), Bangalore vs. Sri Mathikere Ramaiah Seetharam, Bangalore

In the result, the appeals filed by the revenue are dismissed and the COs filed by the assessee are partly allowed for statistical purposes

ITA 543/BANG/2021[2015-16]Status: DisposedITAT Bangalore07 Nov 2022AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri H. Nagin Khincha &For Respondent: Shri M. Mathivanan, D.R
Section 131Section 132(4)Section 153CSection 45(2)