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2016 (12) TMI 182 - AT - Income TaxProfit on sale of property – Business income or Capital Gain - Held that:- A perusal of the various recitals in the agreement indicate that apart from acquiring all development rights, the assessee is the de facto owner of the property as he has the absolute rights of possession, developing, selling, receiving sale proceeds, etc. to the total exclusion of the erstwhile owner. This view of ours is further confirmed as perusal of the sale agreement of the said property that the assessee has signed, sealed and delivered the property in his actual capacity as “OWNER” of the property. If the ownership still vested in the erstwhile owners, as claimed by the assessee, then they should have been at least consenting parties to the sale deed dated 30.12.2009. These documentary evidences, in our view, puts paid to the assessee’s claim on facts that the income/profit arising on sale of the gala was his business income. In our view, the income from sale of gala has been correctly held by the authorities below to be exigible to tax as STCG and not business income. - Decided against assessee Applicability of the provisions of section 50C - Held that:- Holding that the assessee’s profit on sale of the gala vide agreement dated 30.12.2009 is to be assessed as STCG and not business income the provisions of section 50C are to be invoked and have been rightly invoked in this case by the authorities below. Since the sale consideration stated in the sale agreement dated 30.12.2009 for sale of gala at ₹ 80 lakhs, was lower than the valuation shown for stamp duty papers by the Stamp Validation authorities at ₹ 1,02,20,000/-, the provisions of section 50C have been correctly invoked for taking the sale value of land at ₹ 1,02,20,000/- while computing the STCG. Cost of Improvement disallowed - Held that:- Except for raising these general arguments before us, the assessee had not placed on record any material evidence which controverts any of the findings of the authorities below on this issue. In this factual matrix of the case, we uphold the action of the authorities below in disallowing the assessee’s claim for having incurred expenditure as cost of improvement - Decided against assessee Disallowance out of Wages @10% - Held that:- CIT(A) upheld the said disallowance of 10% of wages expenditure as he found the explanation put forth by the assessee to be unsatisfactory. Before us, except for raising this ground, the assessee has not been able to bring on record any material to controvert the findings of the authorities below. In this factual matrix of the case, we uphold the disallowance of ₹ 38,344/- being 10% of expenditure incurred on wages. - Decided against assessee Disallowance of interest expenditure - Held that:- Both the AO and CIT(A) has summarily brushed aside the assessee’s arguments as unsatisfactory without assigning any cogent reason for the said disallowance. In this factual view of the matter we, in the interest of justice, set aside the orders of the authorities below on this issue and restore the matter to the file of the learned CIT(A) for fresh consideration and adjudication after affording the assessee adequate opportunity of being heard and to file details/ submissions required and the AO opportunity to rebut the same.
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