Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 990 - HC - Income TaxSale of land - business income or capital gain - Tribunal held that the income from the sale of undivided share in land and sale of flats separately in different years cannot be subjected to computation of capital gains and said income is to be treated as business income - Held that:- The respondent is an individual. Unlike the companies incorporated under the Companies Act, 1956, whose articles of association contain the object clauses, an individual need not necessarily confine his activity to a particular line of business. It is an admitted fact that the respondent was a partnership firm, which purchased the property only as a part of its business assets. Therefore, there cannot be a presumption that the respondent cannot carry on any activity other than that of manufacture and sale of pharmaceutical products. Hence, the Commissioner of Income Tax (Appeals) and the Tribunal were right in holding that the assessee was entitled to treat it as a business income. - Decided against revenue. Valuation report submitted by the DVO - reliance placed by the Assessing Officer under Section 69C - Tribunal held that the addition of difference in cost of construction based on DVO's valuation report made by the Assessing Officer under Section 69C cannot be sustained - Held that:- The value adopted for the purpose of executing sale deeds to convey the undivided share of right in the land was only for the purpose of registration, which is evident from the fact that the guideline value was adopted by the assessee to register such documents. It is to be seen therefore that the consideration paid by the buyers of the apartments is wholesome consideration for a dwelling unit. The Assessing Authority has no case that the assessee had received any consideration in excess of the consideration reflected in the registered documents and in the books of accounts. No buyer has ever told the Assessing Officer that he has paid something more to the assessee than what was stated in the accounts. Therefore, there cannot be a case that the assessee had spent something more and realized something more from the buyers. When such a case is not possible, there is no basis for dissecting the superstructure from the wholesome transaction and attempt to adopt a different valuation for the said superstructure. The whole exercise of the Assessing Authority in this regard is irrational. We do not see anything wrong with the opinion of the Tribunal in this regard - Decided against revenue. Eligibility of benefit of deduction u/s 080IB - whether the Tribunal was right in holding that the assessee had developed the land to the extent of one acre and above to be eligible for the benefit of Section 80IB(10)? - Held that:- The Tribunal has rightly pointed out that it is not necessary for the developer to convey the entire extent of one acre and above to the purchasers. If a property is lawfully developed by a buyer, one third (1/3) of the total extent of land should necessarily be reserved for public utility such as roads, etc. It is not possible for a developer to convey the entire land in favour of the purchasers, as he is obliged by the Town and Country Planning Act, 1971 and the Development Control Rules to leave spaces earmarked for public purposes. Therefore, this question has also been rightly answered against the Department by the Tribunal. - Decided against revenue.
|