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2013 (7) TMI 455 - BOMBAY HIGH COURTCapital gain - transfer - Whether ITAT justified in holding that no capital gain will arise in the concerned assessment year as the assessee was restrained by Industrial Court as well as this Court from disposing the factory land - Held that:- no transfer of capital assets by sale of land at Goregaon had taken place - during subject assessment year, no construction activity took place and even commencement certificate was issued in a subsequent assessment year. The amount received by the respondent-assessee was only an advance requiring fulfillment of certain obligations. The agreement itself provides that in case the respondent-assessee is not able to fulfill its obligation, then it was required to refund the amount to the developer. Thus, there was no transfer of land during that assessment year - Assessing Officer has interfered without any evidence that possession of factory land was given to respondent-assessee in the subject assessment year on the basis that construction activity had started. This is erroneous as the commencement certificate was only received from BMC in the next assessment year - Decided against Revenue. Conversion of the land into stock in trade - Whether Tribunal justified in holding that there was conversion of the land into the stock-in-trade during the Financial Year 1991-92 and therefore the expenditure incurred during Financial Year 1999-2000 was work-in-progress without appreciating that there was no conversion in the Financial Year 1991-92 and there being transfer within the purview u/s. 2(47)(v) of the ITAT during the Financial Year 1999-2000, the capital gain was chargeable during the assessment year 2000-01 - Held that:- respondent-assessee decided to convert its factory land at Goregaon into stock-in-trade for the purpose of engaging in the business of real estate development - In 1992, assessee by extra ordinary general meeting took consent from the share holders to enter into business of real estate development and for that purpose converting its factory land into stock-in-trade. Thereafter, the respondent-assessee in furtherance of its objective of developing the factory land at Goregaon, sought permission to shift its factory from Goregaon to Taloja as well as to convert the factory land from industrial zone land to residential zone land. The respondent-assessee also obtained an NOC from the BMC for change of user of the factory land in October, 1993. The respondent-assessee also made various efforts with the Urban Land Ceiling (ULC) authorities, seeking permission for development under Section 22 of the ULC Act, 1976. The necessary permission was obtained in October 1999 - no reason to interfere with the finding of fact arrived at by the Tribunal - Decided against Revenue.
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