Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (1) TMI 600 - HC - Income TaxDisallowance u/s 40[a][ia] - income from the sale of property under consideration - to be taxed as capital gains or as income from business - HELD THAT:- It is ex-facie apparent that based on a letter said to have been written by the assessee who is no more to Sri.Rami Reddy which is said to have been found in possession of one Sri.Purushotham Reddy, AO has arrived at a conclusion that the transaction in question was taxable as business income and not capital gains. It is significant to note that the said property was held by the assessee as long term capital asset. Tribunal being the last fact finding authority, has recorded a finding that the contents of the letter alleged to have been written by the assessee to his partner do not clearly establish as to whether the assessee was really carrying on the activity of adventure in the nature of trade or that these properties were considered as trading assets by the assessee. Similarly, as regards the sale consideration of the property in question, addition has been made by the Assessing Officer merely based on the statement of Sri.Purushotham Reddy which is not substantiated by any other material evidence. Disallowance under Section 40[a][ia] of the Act by the Assessing Officer cannot be sustained in view of the income from the sale of property under consideration is now held to be taxed as capital gains and not as income from business. Even the other ground of challenge inasmuch as the Tribunal remitting the matter to the Assessing officer with a direction to examine and verify whether the compound wall was actually constructed around the schedule land and the expenditure allegedly incurred towards the construction of the compound wall, paid to GK Associates, has no merit. Indeed, the factual aspects have to be examined at the ground level by the Assessing Officer. The judgment relied upon by the Revenue is not applicable in the present facts and circumstances of the case. Moreover, the Hon'ble Apex Court has observed that in reaching the conclusion that the transaction is an adventure in the nature of trade, the Tribunal has to find primary evidentiary facts and then apply legal principles. It is evident that the Tribunal has rightly considered the factual aspects and then applied the legal principles. There being no perversity or arbitrariness in the order of the Tribunal impugned, the same requires to be confirmed. The issues involved relates to pure questions of facts, no substantial questions of law arises for our consideration.
|