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2023 (3) TMI 1217 - AT - Income TaxIncome earned by the sale of the property - taxability lies in the hands of assessee AOP or the members of the assessee AOP - taxable in the hands of the members of the assessee OR in the hands of the Assessee - assessee, an association of persons (AOP) registered under the provisions of the Bombay Non-Trading Corporation Act, purchased a property in an auction carried out by the office of the Chief Commissioner of income tax, Gujarat, Ahmedabad - As submitted assessee was the real owner of the property and the assessee had complete control over the entire venture from the start to the end - HELD THAT:- CIT(Appeals) has not erred in facts and in law in holding that it was the members of the assessee AOP who were the “real owners” of the impugned property in question, and accordingly income is liable to be taxed in the hands of the respective members, in proportion to their holding. Whether sale of property was capital gains or adventure in the nature of trade and hence taxable as business income? - The entire purchase was funded by the members of the AOP. No interest-bearing loan was taken for the purpose of purchase of said property and construction thereon. No change in land user of the property was affected in order sell the aforementioned property. It is not the case of the Department that when initially the assessee AOP purchased the land and took possession thereof on 19-01-1994, the buyers were identifiable and thus the whole purpose of purchase and subsequent construction was for the purpose of selling the same and not earning any rental income. Accordingly said sale of property would be taxable as capital gains and not business income, and we find no infirmity in the order of ld. CIT(A). Year of taxability of the aforementioned property - We find no infirmity in the order of Ld. CIT(Appeals) wherein the held that the year of taxability of the impugned property sold was financial year 2007-08 relevant to assessment year 2008-09.
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