TMI Blog2010 (4) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal, Bangalore in I. T. A. No. 10(Bang)/2001, dated February 21, 2005 raising the following substantial questions of law : (i) Whether the appellate authorities were correct in holding that a sum of Rs. 29,83,050 derived by the assessee from the sale of 28,510 square feet of land received by the assessee for developing 2 acres 29 guntas of agricultural land belonging to Sri Anjanappa into a residential layout should be treated as the capital asset of the assessee and indexation allowed by bringing the said income to tax under the head capital gains. (ii) Whether the appellate authorities having held that the assessee had acquired 28,510 square feet of land in the course of business were correct in holding that the sale proceeds de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by view of the agreement after completion of the formation of the lay out. The assessee filed the return of income onSeptember 29, 1997, for the assessment year 1997-98 offering the capital gain in accordance with the income earned by selling the 30,000 sq. ft. of land which was given to him by Sri Anjanappa in terms of the contract. 3. The Assessing Officer rejected the case of the assessee and treated the sale consideration received by the assessee as an income from business. Accordingly an order of assessment came to be passed. Against it, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), which came to be allowed by holding that the sale consideration received by the assessee by selling 30,000 sq. ft. of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax (Appeals) as well as the Tribunal was required to be set aside. He further contends that in terms of the Transfer of Property Act, 1882, 30,000 sq. ft. of land had not been registered in the name of the assessee. Therefore the assessee could not have been considered as the owner in order to consider the case of the assessee holding that the income received is a capital gain and not a busi-ness income. 7. Per contra, Sri Parthasarathi, learned counsel for the respondent asses-see contends that under the Income-tax Act, if the sale consideration is passed on and if the possession is transferred, it amounts to sale and the registration of sale deed is not required in order to treat the transaction as complete sale. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial is placed before the court to show that the assessee was indulging in such business right from the beginning in order to treat the sale consideration received by him as a business income and to treat 30,000 sq. ft. of land received by him from Sri Anjanappa as a capital in nature. According to us, considering the agreement placed before us, which was entered into between Sri Anjanappa and the assessee the asses-see has spent amounts for the formation of lay out and Sri Anjanappa in turn has delivered 30,000 sq. ft. of land in terms of the contract. When the assessee is not indulging in such activities, which is not his regular busi-ness, if 30,000 sq. ft. of land is acquired, by spending Rs. 7,00,000, the said amount has to be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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