Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 1039 - AT - Income TaxIncome from sale of land - classification of the land in revenue records - whether it was agricultural land sold? - fixing value of land - Held that:- AO has conclusively established that the lands sold by the assessee in the previous year relevant to the assessment year were not agricultural in nature, but, on the other hand, they are non-agricultural land. Therefore, it definitely comes under the category of “capital asset”. Further, the assessee has converted it into stock-in-trade and also the assessee during the financial year 2006-07, obtained NOC from Tahsildar, Sriperumpudur on 18.12.2006 and applied for plot approval from Chengalpet local authorities in the month of January,2007. The assessee received said approval for converting his land into housing plots on 06.02.2007 from Deputy Director of Urban Development and housing plot was developed and sold by assessee. When the basic nature of the land itself found to be nonagricultural, the arguments regarding status of the property, whether within metropolis or outside the limit of the metropolis, is irrelevant. A non-agricultural property, whether inside the municipality or outside the municipality or even in a remote village is a “capital asset” or stock-in-trade and transfer of the same may generate income liable for capital gains taxation or business income as the case may be. Regarding fixing the value as on 01.01.2007 by the CIT(A) at ₹ 53/- per sq. ft., which is based on the sale incidence of the property situated at Novaloor village located next to Nattarasampattu village vide Sale deed June, 2007 for 23,100/- per cent at ₹ 53/- sq. ft. In our opinion, when the assessee sold the property in the A.Y 2010-11 at ₹ 351 sq. ft., it cannot be said that the value of that property as on 01.04.2009 be at ₹ 53/- per sq. ft.. Considering the sale value at ₹ 351 sq. ft., we direct the AO to work out the value of opening stock as on 01.04.2009 by applying the reverse indexation method. Accordingly, this issue is remitted to the file of AO for his fresh consideration on this direction only. Disallowance of 10% value expenditure incurred - Held that:- When the assessee has not produced the bills and vouchers, there is every chance of inflating the expenditure by the assessee. Accoridngly, we direct the AO to disallow at 5% instead of 10% of the total expenditure of ₹ 19,60,530/-. This ground is partly allowed for statistical purposes.
|