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2023 (2) TMI 965 - AT - Income TaxLong Term Capital Gains - claim and proof of conversion of agriculture land into stock-in-trade - capital asset u/s 2(14) - contention of the assessee that the point when agriculture land is converted into stock-in-trade, no capital gains takes place since neither agriculture land beyond 8 kms nor stock-in-trade comes to fall within the meaning of section 2(14) - HELD THAT:- As noted that even circumstantial evidence does not suggest that land has been converted into stock in trade as claimed by assessee. AO was correct in holding that assessee has not provided any accounting entries passed in the books of account for year 2011-12 wherein above land are classified as stock in trade in 02/07/2011 and even such lands are not shown as stock in trade for years 2012, 2013 and so on. The assessee was required to disclose such lands as stock in trade in books of account and in ITR filed by it on year to year basis. Had assessee been actually converted land into stock in trade, he would have obtained audit report u/s 44AB of the Act, filed audit report, disclosed sale of land as turnover and remaining land if any as stock in trade and failure to obtain such audited books of account clearly prove that entire theory of conversion of agricultural land as stock in trade is baseless and after thought - dismiss the appeal of the assessee. Computation of LTCG - Transfer value determination - AO ought to have accepted the measurement at Rs.1,800/- per sq. mt. against Rs.1950/- per sq. mt as transfer value when the valuation difference is less than 10% - HELD THAT:- We note that amendment in third proviso to section 50C of the Act was held to be retrospectively applicable in the case of Maria Fernandes Chery (2021 (1) TMI 620 - ITAT MUMBAI] - We note that as per assessee the measurement is at Rs.1,800 per sq. mt. However, as per Revenue, the measurement is at Rs.1950 per sq. mt, as transfer value. We note that difference between both the measurement is 8.33%, which is less than 10%. Such tolerance limit is allowable as per provisions of third proviso to section 50C of the Act. Therefore, we direct the assessing officer to consider measurement at the rate of Rs.1,800 per sq. mt. to compute the long term capital gain. Hence, we allow the additional ground raised by the assessee.
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