Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 493 - AT - Income TaxAssessment u/s 153A - head of income for the purposes of assessment of gain arising on sale of plot of lands has been changed from ‘capital gains’ offered by the assessee to ‘business income’ assessed by the AO - Held that:- Referring to decision in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT], we are of the view that various additions/disallowances made by the AO are clearly beyond the scope of the authority vested under s. 153A of the Act owing to absence of any incriminat ing material or evidence deduced as a result of search. No reference of such incriminat ing material, if any, is found in the assessment year. We hold that routine adjustments in the nature of change of head of income of reported income without any nexus to incriminating material found, if any, as a result of search operations are not sustainable in the eyes of law in Section 153A proceedings. Hence, the re-alignment of head of income towards gain on sale of land for the purposes of taxability requires to be quashed. Thus, we find merit in the legal ground raised by the assessee. In this view of the matter, we do not intend to adjudicate the merits of the adjustments / re-alignment. Capital gains arising from the sale of Sanavad land under the head of ‘business income’ - Held that:- Due to the large size of the land, it was divided and sub-divided and sold to the interested customers. These facts do not exclusively suggest that the ent ire exercise was to exploit the land commercially in the nature of adventure which is akin to the business. In the light of the decision of the Hon’ble Gujarat High Court in the case of Premji Gopalbhai (1977 (8) TMI 43 - GUJARAT HIGH COURT) and the decision of Ahmedabad Tribunal in the case of Hiteshkumar Ashokkumar Vaswani (2017 (7) TMI 954 - ITAT AHMEDABAD), we find merit in the plea of the assessee for treating the same to be gain arising for capital nature and thus, assessable under the head of ‘capital gains’.
|