TMI Blog2015 (1) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 50C of the Act are attracted in specific cases and are not applicable - the income arising in the hands of the assessee on sale of development rights by adopting the sale price at ₹ 1,05,00,000/- and adopting cost price of ₹ 44,00,000/- is to be computed in the hands of the assessee to the proportion of his shareholding – the AO is directed to compute and include the same in the hands of the assessee under the head ‘income from short term capital gain’. CIT(A) failed to include the income from business in the hands of the assessee - the expenses claimed by the assessee i.e. office establishment expenses, provision for compensation to litigation are not to be allowed as expenses - the provision for compensation to litigants have not been allowed by the CIT(A) - assessee rightly admitted that there is an error in the order of CIT(A) while computing the income in the hands of the assessee – the AO is directed to re-compute the income – Decided partly in favour of revenue. - ITA No. 686/PN/2013 - - - Dated:- 30-10-2014 - G. S. Pannu And Ms. Sushma Chowla,JJ. For the Appellant : Shri B. C. Malakar For the Respondent : Shri Kishore Phadke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 22,00,000/-. The income from short term capital gain of ₹ 26,03,717/- was added in the hands of the assessee and as the same was not disclosed by the assessee and the same was held to be concealed income of the assessee. 5. Before the CIT(A), the assessee explained that it had entered into a development agreement with the intention to develop the property and the said property was never intended for self use or as an investment. It was further explained by the assessee before the CIT(A) that the property was transferred merely because there was litigation involved and as the initial transaction was the business transaction, the income generated from the same was business income and could not be treated as income from capital gain. The assessee also explained that he was engaged in the business of real estate transactions as well as commission agent and filed the copies of the income tax returns relating to assessment years 2007-08 to 2009-10. The CIT(A) noted that the nature of business of the assessee was civil contractor as well as commission agent as apparent from the assessment order as well as the return of income filed for assessment years 2007-08 to 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sale of rights by the assessee. It was further pointed out by the learned Authorized Representative for the assessee that the assessee purchased development rights and not land building and this sort of transaction was business arrangement. Without prejudice to the same, the learned Authorized Representative for the assessee pointed out that the issue arising in the present appeal is whether the provisions of section 50C of the Act could be invoked. Reliance was placed on the decision in the case of CIT Vs. Thiruvengadam Investments P. Ltd. (2010) 320 ITR 345 (Mad). 8. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to the assessability of the sale proceeds received by the assessee on account of sale of development rights. The assessee was a civil contractor and was also earning income as commission agent. During the financial year 2006-07, the assessee had received commission of ₹ 8,47,172/- and during the financial year 2008-09, the assessee had received a commission of ₹ 4,99,000/- which had been declared in the return of income filed for the relevant assessment years, as noted by the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been included the rights in or in relation to any Indian company. The word transfer is also defined under the Act under section 2(47) of the Act and includes sale, exchange, relinquishment of an asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law. 11. Under the provisions of section 50C of the Act which is a special provision in relation to the full value of consideration in certain cases, it is provided that where the consideration is received or accruing, as result of transfer of a capital asset, being land or building or both, is less than the value adopted or assessed by the State government authority, for the purpose of payment of stamp duty, then, the value so adopted or assessed, shall for the purpose of section 48 of the Act, be deemed to be full value of consideration received or accruing, as a result of such transfer. The provisions of section 50C of the Act are attracted where there is a transfer of capital asset being land or building or both. In the facts of the present case before us, the assessee had entered into an agreement for the development of the property. By way of the said agreement, the assessee had some ..... X X X X Extracts X X X X X X X X Extracts X X X X
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