Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 732 - AT - Income TaxRevision u/s 263 - as per CIT(A) capital gain on sale of land should be taxed as business income - Held that:- As seen from the order of A.O. and statements recorded during the survey, the aspect of gains on sale of lands was thoroughly examined by A.O. Therefore, the prima facie objection that it is change of opinion by the Ld. CIT on the given set of facts has to be accepted as a valid one. A.O. not only accepted the capital gain but also denied cost of improvement in the order which was also confirmed by Ld. CIT(A). Therefore, order of CIT that income has to be treated as business income that too in this year only, ignoring the fact that in earlier two years similar incomes were quantified and accepted cannot be upheld. Therefore, the order of CIT on Dommara Pochampally gain in the hands of Mahindra has to be set aside. - Decided in favour of assessee. Gain on agreement with M/s Victory Avenues Ltd., (VAPL) should be taxed entirely in the year under consideration as against the income offered to the extent of sales made by VAPL as stated by CIT(A) - Held that:- The stand of CIT cannot be supported. First of all, the agreement with VAPL is a GPA agreement without handing over possession. This stand gets support by the stamp duty paid and accepted by Registration authority. The agreement was registered as GPA agreement and not as a sale agreement. Thus on facts the agreement cannot be considered as sale agreement so as to bring entire capital gain tax in the impugned year. Moreover, there was a statement from Manager of VAPL recorded by A.O. during survey which indicate that there were lot of unsold plots and detailed statement was recorded about sale of various plots and how the monies are accounted. This indicates that the said VAPL is only acting as an agent in sale of property and it did not acquire the property. Therefore, stand of CIT that the land/property in question was sale cannot be accepted. Lastly, the CIT himself accepted that gains on sale of Medchal land has to be assessed under the head “Long term capital gains”. The gain is taxable at the rate of 20% only. Whether it is taxed in A.Y. 2007-08 or in later years, the tax rate is at 20% only. Thus, there is no prejudice caused to Revenue. Therefore, the twin conditions for invoking jurisdiction under section 263 have not been satisfied. For these reasons, we are of the opinion that the orders of CIT cannot be justified and so they are accordingly set aside. - Decided in favour of assessee.
|