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2018 (11) TMI 1000 - ITAT AHMEDABADDetermination of character of income - Income from sale of plot of land - LTCG or Business income - commercial intention - Held that:- The assessee could not find any single buyer for sale of entire piece of land. The assessee essentially has not carried out any development work as alleged except necessary basic requirements like leveling, approach road from pucca roads and other statutory requirements necessary for plotting of said land as per directions of the authority for sale of individual plots. The assessee, in essence, has sold the land by dividing into pieces of land and profit therefrom has been offered as capital gain in sync with the declared position in the regard. As reiterated before the CIT(A) that land in question (Kalhar land & Sola land) before its sale was declared as capital asset in the balance sheet inception. Thus, the intention of the assessee to hold the assets as capital assets was evident from the treatment given in the books of accounts. The assessee made para-wise rebuttal of the observations of the AO to plead that the land held by the assessee for a very long period of time before its sale could not be regarded as trading asset for its taxability under the head ‘business income’. CIT(A) after taking into account various submissions made on behalf of the assessee as reproduced in the appellate order, correctly agreed with the claim of the assessee that gain arising on sale of land cannot be regarded as ‘business income’ as against the claim of the assessee for its taxability under the head ‘capital gains’. - Decided in favour of assessee. Deduction claim under s.54F - CIT(A) found merit in the claim of the assessee that construction of the residential house on the land was complete and is supported by electricity bills, property tax etc. - Held that:- CIT(A) inter alia noted that the assessee has demonstrated and substantiated the completion of the house construction with reference to receipt of AMC for property tax. The cost of construction is made out of the capital gain deposit scheme where the assessee deposited ₹ 20 Lakhs and the evidences were found by the CIT(A) to establish direct link between withdrawals and the payment made for construction etc. The Revenue could not rebut the findings of the CIT(A) reproduced in the preceding paragraphs in this regard. Therefore, we do not see any intangible reason to disturb the action for the CIT(A). - Decided against revenue
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