TMI Blog2013 (5) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... erial therein. 2. The ld. DR initiating his arguments has submitted as under:- In this case, assessment was completed u/s. 143(3). The assessee purchased a property in the financial year 1999-2000 which was held as stock and project under consideration as per the Balance Sheet as on 31.03.05. The property was sold during the previous year ( on Q9. 08. 05) and profit on sale has been shown by the assessee as Long Term Capital Gain. During the course of hearing assessee admitted that the property was included in the stock in trade which has been transferred to the investment on the basis of the decision taken by the Board of Directors on 06. 10. 05 on the basis of legal opinion obtained from an Advocate and accordingly, balance sheet f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards cost of improvement. This expenditure includes an amount of ₹ 7,50,000/- paid to Kolkata Municipal Corporation towards plan sanction fee which is mentioned in of the sale deed. These clearly point to the fact that assessee was very much engaged in an organized activity towards construction / development of building on the land which indeed constitutes business. The assessee company also commercially exploited the land by leasing it out and therefore, it can not be said that it was not parted with since purchase. Ld. CIT (A) also misdirected himself by considering the appellant s arguments that it was a single transaction which can not constitute trade. The assessee had shown in the Balance Sheet Land Building under construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) also misdirected himself, particularly in reference to the array of court decisions cited before him, to consider the basic fact of this case. In the written submission before him the assessee company itself admitted that the land was purchased on 31. 05. 1999 and was shown as stock in trade. The land remained under the same head i.e. stock in trade upto 31. 03. 2005 as per Balance Sheet and even on the date of sale as mentioned in the sale deed dated 09. 08. 2005. In the intermittent period, assessee has commercially exploited to get rental income. Thus, from the very beginning, the initial intention, which is an important factor, is indicative in the nature of trade in the line of the assessee s business. During the previous year asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we have discussed the matter with our auditor. He advised us that there is no difference between showing the property under the head Stock Project under construction and Investment . Later on during the course of Board Meeting on this issue there was a difference of opinion, but that time we have finalized our Balance Sheet for the year ended 31. 03. 05. Subsequently one of our Directors took a second opinion on this issue and also obtains a legal opinion regarding the technicality and viability regarding revision of accounts (which has already been furnished before you). As per said expert opinion we have revised our Balance Sheet and passed the necessary entry in the books of accounts on 31. 03. 05 which is enclosed herewith. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there are case laws to the issue that a single transaction of sale of land cannot be considered as business activity to be carried out in so far as the AO himself has not denied the cost of improvement which has already been accepted by him, as the particular plot was not to be considered as an adventure in the nature of trade as otherwise considered by the AO. 5. We have heard the rival contentions and carefully perused the material available on record. On a careful consideration of the facts and circumstances of the case, we are inclined to uphold the order of the ld. CIT(A) for the simple reason that the basic facts leading to computation of capital gains was not a choice but in accordance with the provision of Income tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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