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2020 (5) TMI 568 - AT - Income TaxBusiness income taxability - year of assessment - land held by the assessee as stock in trade - as per CIT-A it is taxable only in the year of sale of Villas and not in the relevant AY - HELD THAT:- In the case of a capital asset, if it is transfer under any of the provisions of section 2(47), coupled with handing over of possession of the capital asset, capital gain is to be offered on mercantile basis in the year in which the possession is given. As rightly pointed out by the CIT(A) in the case of the assessee, the land has been treated as stock-in-trade and the assessee has only contributed its portion of land to the JDA and is liable to offer business income in the year in which the stock-in-trade is sold. The CIT(A) has observed that the assessee has offered business profits in the AYs 2015-16 and 2016-17 i.e. the years in which the Villas have been sold. Since the stock-in-trade has only been contributed and has not been sold during the relevant AY, there is no receipt or accrual of business receipt during the relevant AY. Further, such position has been confirmed by the coordinate bench of Tribunal at Bangalore in the case of Dheeraj Amin Vs. ACIT [2014 (6) TMI 1017 - ITAT BANGALORE] the authorities below indeed erred in bringing to tax the anticipated business profits on assessee’s entering into a development agreement in respect of the land held by the assessee as stock in trade - Decided against revenue.
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