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2017 (7) TMI 954 - ITAT AHMEDABADGains arising on sale of Santaj land and Rakanpur land - LTCG OR business income - Held that:- We find that the action of the AO was simply guided by the considerations of the Revenue alone to collect more taxes without bringing any concrete material on record to justify that the acquisition of land under sale was induced by commercial spirit. At this juncture, we observe that section 2(14) stipulates that property can be ‘capital asset’ even if connected with business of the assessee. Therefore, the assessee is entitled in law to hold certain class of assets as capital asset even while he is dealing with the asset of similar nature in business with commercial objectives. Thus, we find that plea of the assessee has merits and deserves acceptance. We accordingly hold that land/properties were held by the assessee as ‘capital assets’ before its sale and consequential gains arising on sale thereto is chargeable under the head ‘capital gains’. Accordingly, the AO is directed to consider the capital gains arising on sale of land/properties as chargeable under the head ‘capital gains’ as claimed by the assessee. - Appeal of the Assessee is allowed.
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