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2019 (11) TMI 913 - AT - Income TaxGain on sale of land - year of taxation - HELD THAT:- The “year of taxation” is the year of transfer of possession of land by the transferee from the custody of the transferor. The said decision is relevant for the ratio that the transfer is not complete and the gains are not taxable in that assessment year 2011-12 when the possession of the land is with the transferor till the entire consideration is paid, which happened in the assessment year 2012-13 in this case. Thus, the year of possession of land, payment of entire consideration and the compliance to the conditions stated in the agreement are the relevant factors that decides the year of taxation. In the present case, these events happened only in the assessment year 2011-12 and not in the current assessment year 2008-09. Accordingly, we are of the opinion that the year of taxation in the assessment year 2011-12 offered by the assessee and not assessment year 2008-09 as considered by the Assessing Officer in the assessment. Therefore, the relevant issue is decided in favour of the assessee in respect of year of taxation. Proper Head of Income – Capital Gains OR Business Income - HELD THAT:- It is undisputed fact that the assessee never offered any business income on trading of land either in the past or in future assessment years. It is also born out of the records that the said asset has been consistently shown as “fixed asset” and not as stock-in-trade. Regarding the Assessing Officer’s claim that the said transaction constitutes an “adventure in nature of the trade”, we are of the opinion, test laid down in the case of G. Venkataswami Naidu [1958 (11) TMI 5 - SUPREME COURT] in matters of dispute relating to the adventure in the nature of trade, we find the CIT(A) analyzed the said judgement and gave a finding that the said test laid down is not applicable to the facts of the present case. Therefore, in our view, the transaction in question does not constitute adventure in the nature of trade Consolidated transaction on sale of land together with his wife constitute an adventure in the nature of trade. It is also submission of the assessee that the similar claim in his wife’s case, co-owner of the property, was accepted by the concerned Assessing Officer taxing the gain under the head income from capital gains. Therefore, we are of the opinion that change in the head of income is unsustainable and not in tune with the relevant judgment in the case of G. Venkataswami Naidu [1958 (11) TMI 5 - SUPREME COURT] . Accordingly, the relevant grounds raised by the Revenue are dismissed. Taxation of income from let out properties - HELD THAT:- It is settled legal proposition that so long as Municipal values are available the same becomes bindings and therefore, the decision of the AO in calculating the rental value based on any other method is unsustainable in law. Therefore, the above conclusion drawn by the CIT(A) on this issue is fair and reasonable and it does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed.
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