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2015 (8) TMI 986 - DELHI HIGH COURT

2015 (8) TMI 986 - DELHI HIGH COURT - TMI - Transfer of two properties - capital gains v/s income from business - CIT (A) concluded that the two residential bungalows sold would result only in long term capital gain also confirmed by ITAT - Held that:- It is not possible to evolve a single test or formula which can be applied in determining whether the transaction was an adventure in the nature of trade. It was also noted that in the case of purchase and sale of land, generally speaking, the ori .....

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a trading adventure. See CIT v. V.A.Trivedi (1987 (1) TMI 12 - BOMBAY High Court )

Tribunal, as a final fact finding authority has confirmed the findings of fact returned by the CIT (A). While doing so, it did not look at any solitary fact to determine as to whether the transactions in question resulted in capital gains or in business income. Several factors were considered, which included the intention of the assessee in purchasing the property, the length of time the property was k .....

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AR DURREZ AHMED, J (ORAL) 1. This appeal by the Revenue under Section 260A of the Income-tax Act, 1961 is directed against the order of the Income-tax Appellate Tribunal dated 18.11.2013 in ITA No.1242/Del/2011 pertaining to the assessment year 2006-2007. 2. The only point urged by the learned counsel for the Revenue before us was with regard to the decision of the Tribunal that the transfer of the two properties to Mr Niranjan Koirala and Ms Sheila Aggarwal was wrongly concluded by the Tribunal .....

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g a portion of the said land. According to the learned counsel for the Revenue, the two properties which are sold to Mr Niranjan Koirala and Ms Sheila Aggarwal, respectively, were also part of the Memorandum of Understanding. However, according to the learned counsel for the assessee, both these properties, which are the subject matter of the present appeal, were excluded from the Memorandum of Understanding for development of the properties. Anyhow, the said Memorandum of Understanding was canc .....

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comprised of land of 2715 sq. yds. upon which a residential bungalow and an outhouse were constructed. The property, which was transferred to Ms Aggarwal, comprised of 9090 sq. yds upon which a residential bungalow and an outhouse were constructed. The property transferred to Mr Niranjan Koirala carried a sale consideration of ₹ 10.51 crores and the sale consideration in respect of the transfer to Ms Sheila Aggarwal was ₹ 35.1 crores. 4. The only issue, that is raised before us, is .....

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(A), after examining the case law, which was presented before him, and also facts of the case, came to the conclusion that the intention of the assessee, at the time of purchase of the property in 1952 was to establish a dairy farm in which it would produce milk. The said property was held as an asset and shown as a fixed asset in the books of the assessee from 1952 onwards. The CIT (A) also observed that no contrary fact had been brought on record by the Assessing Officer and that successive as .....

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cluded that he had no hesitation in holding that the two residential bungalows sold on 27.05.2005 to the existing occupiers of the same by the assessee, would result only in long term capital gain and not in any income under the head of business. 5. The Revenue, being aggrieved by these findings of the Commissioner of Income-tax (Appeals), preferred an appeal before the Income-tax Appellate Tribunal, which confirmed the findings of the CIT (A), by virtue of the impugned order dated 18.11.2013. 6 .....

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ginal intention of the party in purchasing the property, the magnitude of the transaction of purchase, the nature of the property, the length of its ownership and holding, the conduct and subsequent dealing of the assessee in respect of the property, the manner of its disposal and the frequency and multiplicity of transactions, afford valuable guides in determining whether the assessee is carrying on a trading activity and whether a particular transaction should be stamped with the character of .....

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