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Pr. Commissioner of Income Tax-4 Versus Shri Prakash Bhagchand Khatri

2016 (7) TMI 196 - GUJARAT HIGH COURT

Revision u/s 263 - default in claim of deduction under section 54F - CIT(A) was of opinion that the sale of land would not give rise to a long term capital gain, but a business income - Tribunal upholding the order passed by the CIT under section 263 on merits and still storing the issue of allowability of deduction to the file of Assessing Officer - Held that:- Though in the order of assessment, the Assessing Officer has not discussed the claim of the assessee of long term capital gain and dedu .....

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aspect, the Assessing Officer had carried out inquiries about the nature of sale of land and about the validity of the assessee's claim of deduction under section 54F of the Act. Learned counsel for the Revenue however submitted that these inquiries were confined to the claim of deduction under section 54F of the Act in the context of fulfilling conditions contained therein and may possibly have no relevance to the question whether the sale of land gave rise to a long term capital gain. Looking .....

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stated in this order would affect either side in considerations of such claim. - No substantial question of law - Tax Appeal No. 177-178 of 2016 - Dated:- 29-6-2016 - Akil Kureshi And A. J. Shastri, JJ. For the Appellant : Mr. Nitin K Mehta, Advocate For the Respondent : Mr S. N. Soparkar, Senior Advocate with Mr. B S Soparkar, Advocate ORDER ( Per : Honourable Mr. Justice Akil Kureshi ) These appeals arise in common background. Central issue being common, we may peruse facts from Tax Appeal No .....

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on 54F is available in the order under section 263 which is not disputed by the assessee before ITAT ? (B) Whether the Tribunal is right in law and on facts in not accepting the long term capital gain treated as business income although transaction was in the nature of business in line with the past history of the assessee ? 2. The respondent assessee, for the assessment year 2010-11 had filed a return of income in which he had shown long term capital gain of ₹ 1.68 crores (rounded off) fo .....

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n 263 of the Act. He was prima facie of the opinion that the sale of land would not give rise to a long term capital gain, but a business income. After putting the assessee to notice, the Commissioner in his order dated 2.12.2013 observed that the cost of improvement was part financed by borrowed funds which itself would show the intent of the assessee even in the year 2008 was to develop and sell the same to make profit. However, the subsequent turn of event showed that the assessee was able to .....

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Act would be denied. 4. Against such order, the assessee preferred appeal before the Tribunal. The Tribunal by the impugned judgment allowed the assessee's appeal primarily on the ground that two views were possible and in which case, the Commissioner could not have exercised the revisional powers. By the time, the Tribunal gave this judgment, the Assessing Officer had already given effect to the revisional order passed by the Commissioner which proceedings had also travelled before the Trib .....

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es about said aspects. In the order sheet, the Assessment Officer had called upon the assessee to furnish various details including the details of fixed assets and details of sale of land . Thus, details the assessee had provided under a communication made in October, 2012 in which he had provided details of fixed assets and details of sale of land. On 28.2.2012, the assessee had written to the Assessing Officer as under: This is with reference to the date of Construction of new Asset for the pu .....

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sidential house property within a period of one year before or two years after * Construct the residential house property within a period of three years after the date of transfer of the asset. 2. Section 54 of the Income Tax Act dealing with exemption from tax for long term gains on transfer of a long term capital asset other than a residential house provides as under (relevant extracts only): Capital gain on transfer of certain capital assets not to be charged in case of investment in resident .....

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e [constructed, a residential house] (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of .....

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