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2020 (9) TMI 860 - AT - Income TaxIncome from sale of land/building - Business income or Capital gain computation - Addition invoking provisions of Section 50C - HELD THAT:- The intention of the assessee in making above referred transaction of sale purchase was of business nature and was therefore assessable under head Income from Business. Although in the return of income, assessee made a bonafide mistake by showing all such transactions under the head Income from Capital Gain instead of Income from Business. Later during assessment proceedings assessee claimed the transaction as business/ adventure in the nature of trade on this logic that his nature of transactions are of business. Assessee made a request that provisions of section 50C are not applicable on him as the said section is applicable on Capital assets only. Assessee is not liable to pay capital gain tax. Income from sale of land building is taxable under the head “income from business and profession” where provisions of Section 50C are not applicable in so far as the shops were sold on agreement basis prior to 1st October, 2009 when the provisions of Section 50C of the Act are not applicable. Thus, the A.O. was not justified in invoking provisions of Section 50C of the Act. Accordingly, the A.O. is directed to delete the addition made u/s 50C of the Act. Addition u/s 69C and 69 - HELD THAT:- Assessee has made investment for ₹ 1,60,651/- out of advance received from the sale of other shops i.e. out of ₹ 4,82,000/- and out of his own capital. It is worth to mention that the assessee has declared other income of ₹ 1,54,000/- from partnership business during the year and is an old income tax assessee. Ld CIT(A) accepted the claim of ₹ 1,93,315/- only and rejected the appeal for ₹ 6,34,000/-. Ld CIT(A) did not consider that the assessee was having ₹ 5,66,664/- prior to 29/06/2009 and has also withdrawn a sum of ₹ 1,00,000/- from saving bank a/c on 29/06/2009 itself. Both these amounts are more than ₹ 6,34,000/-. Accordingly, no justification for the addition of ₹ 6.34 lacs upheld by the ld. CIT(A). Hence, the A.O. is directed to delete the same.
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