Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 1083 - AT - Income TaxCapital gain computation u/s 45 - JDA - conversion of land into stock-in-trade - Whether capital gain arisen in A.Y.2012-13 with reference to Joint-Venture agreement dated 28.09.2011? - assessee along with other co-owners had entered into Joint Venture Agreement - For calculating Long Term Capital Gain (LTCG), assessee considered value as total consideration, which is the value considered for stamp duty valuation, by the Stamp duty authorities - Assessee claimed that his share is 1/3rd and calculated the LTCG accordingly - HELD THAT:- The Appellant assessee has filed copy of JDA including English translation. As per clause k of the said JDA , the owner has agreed to transfer the impugned property by sale deed in the name of proposed Co-Operative society and/ or in the name of individual prospective buyers. As per the said JDA the owner has only granted right to Developer to enter the impugned property for the purpose of development. As per JDA, the developer has given Rs.1 crore as deposit. No other consideration paid. It transpires from the JDA that there is no actual transfer of land and assessee has not received any consideration also. It is also observed from the copies of the returns of Income filed by the assessee in the paper book, that the assessee has shown Long Term Capital Gain from sale of the impugned land in subsequent years as and when the assessee has received consideration. Assessee has also paid Tax on the said Long term capital gain. Therefore, in the facts and circumstances of this case it is held that there is no capital gain chargeable in AY 2012-13 on the impugned Joint Development agreement. Thus ground number 1 is allowed. Whether the appellant has converted the land into stock-in-trade as claimed? - It is an admitted fact that assessee could not demonstrate conversion of land into stock-in-trade by showing entries in the books of accounts. As per accounting, whenever land is converted into stock-in-trade, it shall appear as closing stock at the end of the year in which it was converted into stock-in-trade. In the case of the assessee it should have appeared as closing stock for the A.Y. 2012-13 and 2013-14. However, we have verified from the profit and loss account filed by the assessee in the paper book that it does not appear as closing stock for the A.Y. 2013-14. The assessee has not filed profit and loss account for the A.Y.2012-13. It is also an admitted fact that no Audit Report has been filed means no Audit has been carried out. It is observed that for A.Y. 2014-15, the assessee has shown sales of Rs.1,96,32,700/-, but, though the sale is more than One Crore, no Audit Report is filed by the assessee. No Balance Sheet has been filed by the assessee for the A.Y. 2012-13. Thus, the assessee has not filed any evidence to substantiate his claim that the impugned land was converted as stock-in-trade before entering into Joint Venture Agreement. Therefore, assessee’s claim that land was converted as stock-in-trade before entering into Joint Venture Agreement is hereby rejected. Therefore, section 45(2) is not applicable in the case of the assessee. Therefore, this ground raised by the assessee is dismissed. Double taxation if LTCG is taxed in the AY 2012-13 - assessee also claimed that assessee has disclosed capital gains arising in respect of the impugned land given for development under Joint Venture Agreement for A.Y. 2013-14 to 2017-18 and substantiate the claim, assessee filed copies of the Returns of Income for those years - HELD THAT:- We have perused the returns of Income filed by the assessee. It is a fact that the assessee has shown LTCG in subsequent years. However, we have already held that LTCG does not arise in AY 2012-13, hence this ground is academic in nature, hence dismissed
|