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2019 (11) TMI 925 - ITAT KOLKATANature of land sold - sale of alleged agricultural land - Lower authorities held that the assessee’s land to be a capital asset u/s 2(14) - HELD THAT:- The assessee’s detailed paper book reveals that the land in issue in sale had been shown as agricultural as per the relevant records as on 26.02.2019. Coupled with this, we find that this is not also the Revenue’s case that the land itself during assessee’s possession had ever been converted to industrial use. Hon'ble Bombay high court’s decision in CIT vs. Debbie Alemao and 2. Joaquim Alemao [2010 (9) TMI 560 - BOMBAY HIGH COURT] holds that it is nowhere necessary for an assessee to prove carrying out actual agricultural activity of the land in issue is agricultural. Both the lower authorities have erred in law and on facts in treating the assessee’s agricultural land sold as industrial giving rise to capital gains in issue. We therefore accept assessee’s former twin substantive grounds to this effect. Deemed dividend addition u/s 2(22)(e) - HELD THAT:- We find no reason to agree with the impugned addition. Case file indicates that the assessee had executed an “MoU” with M/s Spac Martix Pvt. Ltd. on 07.10.2009 agreeing for extending security in the form of assignment or hypothecation of personal assets for securing loan for the company and the latter in turn had to give mutual financial accommodation to the former. The assessee thereafter pleas on record all the relevant details regarding its personal guarantee and collateral security provided to the bank in favour of M/s Space Martix Pvt. Ltd. Page 158 of the paper book reveals that the latter entity had deficient figures of ₹43,87,70,364/- and ₹47,36,60,894/- as on 27.03.2012 and 31.03.2012; respectively. Be that as it may, hon'ble jurisdictional high court’s judgment in Pradip Kumar Malhotra vs. Commissioner of Income Tax, West Bengal-V [2011 (8) TMI 16 - CALCUTTA HIGH COURT] hold long back that such a case does not attract the deeming friction of dividend u/s 2(22)(e). We therefore direct the Assessing Officer to delete the instant latter addition as well
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