TMI Blog2010 (4) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case there was no such material which may constitute the basis to hold that the assessee-respondent has converted or treated the ‘capital asset’ as ‘stock-intrade’ attracting the application of Section 45(2) of the Act - the assessee-respondent has maximised his realisation by sale of his ancestral capital asset which has been incorrectly held in the nature of trade by the Assessing Officer. – decided in favor of assessee - 712, 713 of 2009 (O&M) - - - Dated:- 28-4-2010 - CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Ms. Urvashi Dhugga, Advocate, for the revenue-appellant. M.M. KUMAR, J. This order shall dispose of ITA Nos. 712 and 713 of 2009 filed by the revenue under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Rs. 2,42,61,810/- and Rs. 1,39,17,964/- under Sections 54EC and 54F of the Act respectively and determined the net taxable long term capital gain at Rs. 88,48,758/- after granting the benefit of brought forward long term capital loss of Rs. 20,52,178/-. As far as business profit is concerned, he adopted the sale consideration at Rs. 9,65,49,135/- and determined the business income at Rs. 3,27,59,621/-. Feeling aggrieved both the assessee-respondent and the revenueappellant filed appeal before the Tribunal and the Tribunal found that the issue was whether the sale of land by the assessee-respondent in the instant assessment year constitute as adventure in the nature of 'trade or sale of capital asset'. The Tribunal applied the principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n fact vide notification No. 4/16/97-6LG1/2187 dated 17.02.1999, the area in which the building was located was declared commercial. It is in the above circumstances that the assessee has claimed that he decided to sell the property in question and build a new house for himself. In order to do so, he obtained the approval for commercial use of the property and authorized one Shri Radhey Shyam for sale of such property. The Assessing Officer has not disputed that the asset so held and sold was ancestral property and was initially a Capital asset. However, in his opinion, since the assessee converted his residential property into a commercial property leaving 42% of area for roads by hiring the services of a property dealer, he held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial property leaving 42% of area for roads by hiring the services of a property dealer, the Assessing Officer held that the 'capital assets' were converted into 'Stock-in-trade'. The Tribunal further held that Section 45(2), which was invoked by the Assessing Officer, would not apply infact because there was no change of 'capital asset' into 'stock-in-trade'. The Tribunal held that in the instant case there was no such material which may constitute the basis to hold that the assessee-respondent has converted or treated the 'capital asset' as 'stock-intrade' attracting the application of Section 45(2) of the Act and that the presumption of the Assessing Officer could not be ratified that the assessee had converted or treated the 'capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law showing that in the facts and circumstances of this case, the property belonging to the assessee-respondent could be assessed as 'business income' or it would continue to enjoy the status of 'capital asset' and assessable as 'long term capital gain'. Ms. Urvashi Dhugga has not been able to substantiate her argument by citing any view which may be applicable to the facts and circumstances of the present case. However, she cited the view of a Division Bench of Allahabad High Court rendered in the case of I.T.O. v. Rani Ratnesh Kumari, [1980] 123 ITR 343. The aforesaid judgment would not be applicable because in that case the assessee had purchased the property and re-sold the same after developing it. There was finding of fact with regar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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