Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (5) TMI 798 - ITAT COCHINAddition made in the Income - Assessee received as security deposit (Cost of equipment) in respect of supplies deep-freezers/freezers/fridges to various vendors - Sale proceeds of land - to be treated as business income or under capital gains. Addition made in the Income - As per agreement entered into between the assessee and the vendors, the assessee supplies them with deep-freezers/freezers/fridges of sizes as per requirement of the Vendors concerned after taking from them full cost of the equipment as Security Deposit - HELD THAT:- Since the co-ordinate bench in the case of High Range Foods (P) Ltd.[2011 (2) TMI 1117 - ITAT, COCHIN] has already taken a view on identical issue, by following the said decision, we hold that the deposits collected from vendors cannot be considered as the income of the assessee so long as the agency agreement continues. Accordingly, we set aside the order of Ld CIT(A) on this issue in the hands of both the assessees and direct the AO to delete the addition made on this issue in the hands of both the assessees herein. Sale proceeds of land - to be treated as business income or under capital gains - Tribunal has held in the case of High Range Foods (P) Ltd,(supra) that the intention of the assessee at the time of purchasing the land would decide the nature of income arising on its sale, i.e. if an assessee purchases a land in order to hold it as a “Capital asset”, then the gain arising on its sale shall be assessed as “Capital gain”. On the other hand, if the intention was to hold it as stock in trade, then the profit arising on its sale would be assessed as “Income from business”. Accordingly, we set aside the order of the Ld. CIT(A) on this issues and restore the same to the file of the AO with the direction to examine the issue afresh in the light of principles discussed by the co-ordinate bench of Tribunal in the case of High Range Foods (P) Ltd, supra, and decide the issue accordingly. In the result, the appeals filed by both the assesses are treated as allowed for statistical purposes.
|