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2012 (6) TMI 633 - AT - Income TaxIncome form sale of land - Business Income or Capital gains - assessee, engaged in the business of real estate, constructing flats, sale of land - Held that:- In the present case, property has been committed to a trade and the assessee earned profit in the course of carrying on the business. Assessee never intended to be owner of the land in question and it was not a simple purchase and sale transaction. Rather, the assessee facilitated the development and sale of land in question apart from taking responsibility of getting the process of disputes with respect to the land settled expedited. Therefore, it is clear that the assessee was carrying on business with the above business objectives in mind. Hence, having regard to the nature of activities carried on by the assessee it has to be construed as trading activity of the assessee and the income emerged from this transaction has to be considered as income from business. Non-allocation of indirect expenditure other than interest to the projects under construction - 84% of the work of the company during the year related to the projects under construction - Revenue apportioned indirect expenditure to to Work-in-progress - Held that:- Non allocation of the indirect expenses to the work-in-progress truly affects correct reflection of the profit and loss of the assessee-company. Being so, AO is justified in reallocating the indirect expenses to the capital project of the assessee. Depreciation of centring material - dis-allowance - Held that:- The assessee claimed all this depreciation is relating to the project under construction. The project under construction being the capital asset, depreciation cannot be allowed - Decided in favor of Revenue
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