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2012 (11) TMI 930 - AT - Income TaxCapital gain - receipt of gain on sale of shares - business income or capital gains - held that:- The modus-operandi adopted by the joint bidders was to float three SPVs in the form of companies and to obtain the allotment of land in the name of these companies. Shares were allotted to them in these companies and within five days of allotment, the assessee along with its joint bidders i.e., Naman group sold their shares in SPVs entity NCPL to K. Raheja Corp. Pvt. Ltd. From the above facts, it is clear that what was undertaken by the assessee was a business activity and not an investment in a capital asset. - Held as taxable as business income - Decided in favor of assessee. Taxability of notional income on sale of shares - The Assessing Officer has notionally calculated the profits which the assessee, according to the Assessing Officer, ought to have earned in the sale of these shares and brought the same to tax. - held that:- When the assessee has not charged or earned any income during the impugned assessment year, in our considered opinion, it is not right on the part of the authorities to assume a particular income and then bring it to charge on the ground that certain income has accrued or arisen in the case of the assessee. Under sections 22 & 23 of the Income-tax Act when income is assessed under the head Income from house property”, the Act specifically provides for deeming of income No such parallel provision is available when income is assessed under other heads. The addition made by the A.O on account of short term capital gain of Rs. 2,31,47,564, is purely notional neither accrued nor received by appellant and not in accordance with the judicial precedents and the same is deleted - Decided in favor of assessee.
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