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2017 (11) TMI 1867 - AT - Income TaxDeduction u/s 80IB(10) - HELD THAT:- As decided in own case assessee was held to be entitled to proportionate deduction under section 80IB(10) of the Act in respect of units which fulfils the conditions laid down of having built up area of 1500 sq.ft. Income from Capital Gains OR business income - whether the assessee acquired any capital asset originally in the first place as per section 2(14) of the Act and whether there was any transfer within the meaning of section 2(47) - HELD THAT:- There is no merit in the said stand of the Assessing Officer in allocating the business profits on account of revaluation of development rights in three years as against the facts of the case where developed asset has been sold in various years. The CIT(A) has not agreed with the said stand of the Assessing Officer against which, the Revenue is in appeal. We find no merit in the stand of Revenue in this regard, in view of our accepting the claim of assessee under section 45(2) of the Act. Once the stand of assessee of assessing the gains as long term capital gains under section 45(2) of the Act is accepted, then the consequent thereto, is that no addition can be made on account of increase in work-inprogress. However, the business income as declared by the assessee on sale of developed portion of project is to be assessed in the hands of assessee. The assessee has developed commercial project i.e. KPCT and the business profits are directed to be assessed in the respective years as declared by the assessee. In view thereof, we hold that income declared by the assessee as capital gains under section 45(2) of the Act is to be assessed as such and not as business income which has been assessed by the authorities below. Secondly, there is no merit in grounds of appeal raised by the Revenue against the order of CIT(A) in deleting the addition on account of mismatching of work-in-progress. Reversing the order of CIT(A) with regard to taxing the part of sale proceeds of KPCT project in the year as business income of the year, we direct the Assessing Officer to assess the same as long term capital gains under section 45(2) of the Act proportionately and also include business profits on the portion sold by the assessee. Consequently, the ground of appeal No.4 raised by the assessee is allowed. Rental income received by the assessee on letting out unsold shops - Income from property OR business income - HELD THAT:- Applying the said principle laid down by the Hon’ble High Court of Bombay in CIT Vs. Sane & Doshi Enterprises [2015 (4) TMI 882 - BOMBAY HIGH COURT] and the Hon’ble High Court of Delhi in CIT Vs. Ansal Housing & Construction [2016 (11) TMI 208 - DELHI HIGH COURT] we hold that rental income received by the assessee on letting out unsold shops is to be assessed as ‘Income from property’ in the hands of assessee. The CIT(A) has already directed that in case any expenditure in relation to the marketability of the said unsold shops is debited by the assessee, then the same is not to be allowed in the hands of assessee, against which the assessee is not in appeal. In view thereof, we find no merit in the stand of the Assessing Officer in this regard
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