9911796707
TMI Blog2016 (3) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income for the assessment year 2009-10 on 31.7.2011 declaring a total income of Rs. 66,53,457/-, comprising income from long term capital gain after claiming exemptions u/s 54B & 54F of the Income Tax Act, 1961 (hereinafter called as 'the Act'). The case was selected for scrutiny and accordingly, notices u/s 143(2) & 142(1) of the Act were issued. In response to notices, the authorized representative of the assessee appeared from time to time and furnished the required information. During the course of assessment proceedings, the A.O. noticed that the assessee has declared long term capital gain from sale of residential sites. When a specific query from A.O., the assessee stated that he has converted agricultural land into n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee submitted that the A.O. was erred in adopting gross land area for the purpose of computation of LTCG and developed land area for the purpose of computation of income from business. The assessee further submitted that the A.O. has taken 30,492 sq. yards. in terms of agricultural land for the purpose of computation of long term capital gain, whereas adopted 20,714 sq.yards. for the purpose of computation of income from business, thereby excluded 9,778 sq.yds. land which represents easements lay out towards internal roads, drainage and other civic amenities. The assessee further submitted that when a residential layout is formed by conversion of agricultural land into residential layout, one has to necessarily provide setback for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is computation of income from business u/s 45(2) of the Act, when a capital asset converted into stock in trade. In the present case, the assessee has converted 21.2 acres of agricultural land into non agricultural purposes and formed residential layout. As stated by the A.O., the assessee has converted 1,02,608 sq.yds land and developed 69,646 sq.yds residential sites. The A.O. has given the detailed calculations with regard to the computation of capital gain and income from business. There was no dispute with regard to the applicability of the provisions of section 45(2) of the Act and related computation of capital gain as well as income from business. The only dispute would be in respect of computation of income from business and adop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he has rightly arrived land developed in to residential sites. But, while computing the capital gain of Rs. 1,64,51,958/- he has taken 30,492 sq.yds. land (proportionate agricultural land converted into developed site area of 20,714 sq.yds.) for computing the FMV on 1.4.2008 at Rs. 1,67,70,600/- @ Rs. 550/- per sq.yd. However, while computing the income from business, the A.O. has taken 20,714 sq.yds. developed site area (Actual land sold in terms of site in the financial year 2007-08) for computing the proportionate cost of flat sold of Rs. .1,13,92,700/- to compute the income from business and ignored the proportionate land area of 9,778 sq.yds earmarked for internal roads, drains and other civic amenities, thereby denied cost of such l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) rightly deleted the addition. We do not see any error in the order of CIT(A). Hence, we inclined to upheld the order of CIT(A) and direct the A.O. to allow the cost of 9,778 sq.yds. land which is earmarked for roads, drains, parks and other civic amenities for the purpose of computation of income from business.
8. In the result, the appeal filed by the revenue is dismissed.
9. The C.O. filed by the assessee is supporting the order of the CIT(A). Therefore, for the reasons stated in the preceding paragraph, we dismiss the C.O. filed by the assessee.
10. In the result, the appeal filed by the revenue is dismissed and the C.O. filed by the assessee is also dismissed.
The above order was pronounced in the open court on 11th Feb'16. X X X X Extracts X X X X X X X X Extracts X X X X
|
