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2015 (10) TMI 2469 - ITAT MUMBAI

2015 (10) TMI 2469 - ITAT MUMBAI - TMI - Determination of rent at fair market value - Held that:- Both the parties agreed that the same requires fresh examination at the end of the AO by duly considering the decision rendered by the Hon’ble jurisdictional Bombay High Court in the case of Tip Top Typography (2014 (8) TMI 356 - BOMBAY HIGH COURT ). Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine this issue afre .....

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transactions of purchase and sale in plots. It was also not shown that the assessee has borrowed funds for the purpose of purchasing plots. Since the AO has not brought on record any valid reason to support his case, we are of the view that the tax authorities are not justified in assessing the capital gain as his business income. Hence, we are not able to agree with the view taken by the Ld CIT(A) on this issue. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO t .....

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on the following issues:- (a) Determination of rent at fair market value. (b) Assessment of gains arising on sale of plot as business income. 2. The assessee is an individual and filed his return of income declaring a total income of ₹ 24,69,360/-. The assessee had let out a property having an extent of 400 Sq. Ft., for a monthly rent of ₹ 20,000/- and accordingly computed the income from house property. The AO made market enquiries and determined the annual letting value at ₹ .....

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he assessee had purchased these plots as a co-owner, i.e., jointly with other unrelated persons. Hence, the AO took the view that the assessee had indulged in real estate activities and accordingly assessed the capital gains, referred above, as business income. The assessee could not succeed in the appeal filed before Ld CIT(A) and hence the assessee has filed this appeal before us. 3. We heard the parties and perused the record. With regard to the first issue relating to the determination of An .....

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urt rendered in the case of Tip Top Typography (supra). 4. The next issue relates to the assessment of capital gain arising on sale of plots as business income of the assessee. We notice that the assessee has been making investments in purchase of plots since 2006 at periodic intervals. We further notice that the assessing officer himself has observed that the assessee has held the plots as investment. The only reason cited by the assessing officer was that the assessee did not carry on agricult .....

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the fact that the assessee did not carry on any agricultural activity. In our view, the absence of agricultural activity cannot be considered to be the sole ground to determine the intention of the assessee. The question relating to presence or absence of agricultural activity may be relevant to determine the character of land, but, in our view, the same may not be relevant to determine the intention of the assessee to hold the same as investment or as stock in trade. Similarly, the joint purcha .....

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