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2017 (9) TMI 730 - AT - Income TaxRevision u/s 263 - treatment to income from sale of property - CIT revised the assessment order on the ground that income from sale of property should be assessed under the head ‘Income from capital gains’ and not under the head ‘Income from business’ - nature of property sold - Held that:- The assessee, though claims the impugned property is a business asset, the rental income from the said property has been assessed under the head ‘Income from house property’. The asset has been considered as capital asset in the books of account of the assessee. Once the property has been treated as capital asset, any surplus from sale of such property should be assessed under the head ‘Income from capital gains’. Further, while computing capital gains, if the sale consideration is less than the guidance value, as per the provisions of section 50C, guidance value shall be the full value of consideration for the purpose of computation of long term capital gain. The law is very clear. AO, ignoring all the facts, has simply accepted the income declared by the assessee towards sale of property under the head ‘Income from business’. Though the AO has conducted certain enquiries, but failed to apply his mind to the facts of the present case in the light of provisions of the Act. The AO ought to have assessed the surplus under the head ‘Income from capital gains’. However, he accepted income declared by the assessee under the head ‘Income from business’. Therefore, it cannot be held that the AO has conducted necessary enquiries at the time of completion of assessment on the issues. Therefore, the CIT was right in revising the assessment order u/s 263 of the Act. - Decided against assessee.
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