TMI Blog2022 (4) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... r capital appreciation, the profit deriving there from is taxable under the head 'capital gains'. The intention was to construct property, to hold property and to enjoy the property as the assessee was enjoying this property since 2003, as she was not having any other house property. The compulsion to the assessee for sale of this property was only that she was under heavy debt and to release the debt she has to sell the property and actually by selling these flats she has settled the loans and hence in the given facts, we cannot say that the assessee has entered into any trade or any case 'adventure in the nature of trade'. Hence, we reverse the orders of lower authorities and direct the AO to assess the profit arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of assessee is as regards to the order of CIT(A) confirming the action of AO in treating the income declared by assessee under the head 'capital gains' as 'business income' on account of construction and sale of apartments. For this, assessee has raised various grounds numbering 12, but the issue is exactly one, hence we need not to reproduce. 4. Briefly stated facts are that the assessee is an individual and purchased two plots each costing ₹ 2,00,000/- on 05.05.2003 vide document Nos. 1940 1941 registered at SRO, Oulgaret. The assessee filed copy of building permission from Pondicherry Planning Authority vide its approval letter No. PPA/2215/1089/(3)/2006 dated 26.06.2006 for two storeyed residential building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case law of Hon'ble Delhi High Court in the case of CIT vs. RV Gupta, 258 ITR 261 and the facts of this case, he discussed that the assessee purchased two plots in financial year 2003 and systematically started construction activity on these plots and assessee also employed agents to sell the flats and paid commission. Hence, he agreed with the AO by observing as under:- In the above facts and circumstances, I hold that the income earned by the assessee is from Adventure in the nature of trade and not to be assessed as Long Term Capital Gains. The grounds on the above addition are dismissed. Aggrieved, assessee is in second appeal before the Tribunal. 6. We have heard rival contentions and gone through facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention of profit is business income but in case, assessee holds the property for a long period and investing in the property in an intention to hold and enjoy the property and sells it for capital appreciation, the profit deriving there from is taxable under the head 'capital gains'. The Hon'ble Karnataka High Court held as under:- 6. The assessee was an employee with Syndicate Bank. He purchased a land measuring 2800 sq.ft. in the year 2001. He put up a construction of 12 apartments out of which 8 apartments were sold and 4 apartments were retained for himself. The profits made out of sale of 8 apartments were offered as 'short-term capital gains' and the profits made on sale of the land was offered as 'long- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y held that commodity purchased and sold, not in ordinarily commercial sense and the manner of dealing with the commodity does not term the transaction as trading venture. Further, Hon'ble Gujarat High Court also held in the case of CIT vs. Nathalal Dahyabhai, (1980) 126 ITR 555 that mere ownership of an immovable property, even if acquired in the course of a money-lending business, does not automatically make such property a part of such business. No presumption can be made that the property was still a part of the money-lending business. 6.2. In the present case before us, the intention was to construct property, to hold property and to enjoy the property as the assessee was enjoying this property since 2003, as she was not having ..... X X X X Extracts X X X X X X X X Extracts X X X X
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