Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 494 - ITAT MUMBAISale of land - Nature of the amount received by the assessee - whether the income or loss arising thereof is to be computed under the head ‘Capital Gains’ or as ‘Income from other sources’ - Held that:- The nature of the amount received by the assessee as to whether the income or loss arising thereof is to be computed under the head ‘Capital Gains’ or as ‘Income from other sources’. Admittedly, the amount in question was received by the assessee on account of sale of land and further that the assessee is not in the business of sale and purchase of lands. Hence, under the circumstances the income of the assessee is to be computed under the head ‘Capital gains’. Year of taxability - Held that:- Though the lower authorities have themselves held that in fact such an income was required to be taxed in the assessment year 2002-03 itself, yet, the fact remains that the transfer of the land was not affected in the records. The ownership of the land was standing in the name of the assessee up to the assessment year 2010-11. There was no means or ways for the Revenue Authorities to note that the assessee has sold the land in the year 2001. It was only when the assessee himself disclosed the sale in the assessment year 2010-11 on execution of the sale deed that the matter came to the knowledge of the Revenue Authorities. The assessee himself has shown the capital gain/loss treating that the transfer has taken place in the assessment year 2010-11. Now the assessee is estopped from his own act and conduct to say that the transfer has taken place in the year 2001 relevant to assessment year 2002-03. Moreover, no one can be allowed to take the benefit of his own wrong. It is not the case of the Revenue that the assessee has received any amount over and above the said amount of ₹ 45,50,000/-. Hence, we do not find any merit in the findings of the Ld. CIT(A) that the sale consideration of the land should be taken as market value of the said land under section 50C of the Act. Indexation benefit - Held that:- If the transfer is to be treated as dated back to year 2001, no tax can be levied on the assessee for the year under consideration neither on account of capital gains nor under the head ‘Income from other sources’. As observed above, if we treat the transfer being done in the financial year 2009-10 relevant to assessment year 2010-11, then the assessee is entitled to the indexation cost up to the date of transfer. Entire sale consideration has been received by the M/s. Darshan Builders and they have offered the said amount for taxation as per the provisions of law. So far as the consideration of ₹ 45,50,000/- of land received by the assessee is concerned that was not on account of any part of sale of land. The assessee was the owner of the entire land which was transferred by the assessee as per the terms of the agreement dated 29.06.01. Under the circumstances it is not a case of single transaction of sale. It is in fact a case of two transactions of sale. The first sale transaction made by the assessee to the M/s. Darshan Builders is for a consideration of ₹ 45,50,000/-. Second sale transaction is done by M/s. Darshan Builders to M/s. Tulsi Gruh Nirman & Associates for a sum of ₹ 1.71 crores. So far as the second transaction is concerned, the said M/s. Darshan Builders has already offered the entire consideration of ₹ 1.71 crores for taxation as per the provisions of law. So far as the first transaction is concerned which was not relating to any part of the land but was in relation to the sale of rights of the assessee in the entire land, hence, the assessee was entitled to the indexed cost in relation to the entire land and not 27% of the total consideration relating to the second transaction. No justification on the part of the authorities either taxing the sale consideration received by the assessee as income from other sources or in restricting the indexation benefit to the assessee up to assessment year 2002-03 or up to the 27% of the sale consideration.
|