Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 658 - AT - Income TaxCorrect head of income - whether or not the surplus arising from the sale of land constitutes “capital gains” or “business income”? - as contended that the finding of the Assessing Officer that the assessee himself had divided the land into pieces is contrary to the facts as the layout of the said land was approved by local authority much before the acquisition by the appellant - HELD THAT:- It is settled position of law that to determine whether a particular transaction is an adventure in the nature of trade or investment, the test to be applied is intention of the party at the time of acquisition of the property as held by the Hon’ble Supreme Court in the case of G. Venkataswami Naidu & Co. [1958 (11) TMI 5 - SUPREME COURT] If there is any material on record to indicate that the intention of the party is only to re-sell the asset for profit, no doubt it is a stock in trade. In the present case, the land was sold after the gap of decade and there was no material to show that the appellant had acquired the land only with the intention to re-sell the land for profit. The assessee is undoubtedly entitled to hold two different portfolios in respect of the same kind of asset i.e. stock in trade and investment. In the facts and circumstances of the present case, it does not indicate that the purchase of land was made with the intention to re-sell. In the present case, undisputedly the appellant had made a distinction between those lands which are stock in trade and those lands which are held by investment - none of the factors considered by the AO can militate against the claim of the appellant that it is an investment and the profit arising out of the sale of this land is assessable to tax under the head “capital gains”. Therefore, the orders of the lower authorities are hereby reversed and set-aside. Thus, the grounds of appeal raised by the assessee are allowed.
|