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TMI Blog2023 (6) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A) was justified in upholding the action of learned Assessing Officer in treating the gains received on sale of property by assessee as business income as against capital gains reported by the assessee. The inter-connected issue involved therein is as to whether the assessee is eligible for claim of deduction under section 54F of the Act in respect of reinvestment made in residential property. 3. We have heard rival submissions and perused the materials available on record. The assessee is an individual engaged in the business of commission agent of real estate. The return of income for the assessment year 2013-14 was belatedly filed by the assessee on 07.02.2014 declaring income of Rs. 8,90,130/-, which includes capital gain of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to understand the behavior of the assessee with regard to the purchase and sale of the properties, which could be understood from the following table: F.Y. A.Y. Purchases Sale Remark 2007-08 2008-09 6,02,400 In the Balance Sheet these immovable properties have been shown as Fixed Assets along with other prior owned properties. Assessment u/s 147/143(3) of the Income Tax Act, 1961 was completed by the same Assessing officer on 21.03.2016. Wherein above immovable properties were taken as Fixed Assets.. Copy of assessment order and Balance Sheet as on 31.03.2008 is placed on record. Thereby it is clear and accepted that immovable property purchased is not stock in trade. 2008-09 2009-10 4,85,255 In the Balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... showing the property purchased as fixed assets in her statement of assets and liabilities account, which goes to prove that she would like to remain as an investor and never wanted to exploit the said property commercially by using it for business purposes. Hence, according to AR, there was no intention of the assessee to earn any short-term gains from the said property by engaging herself in the adventure of any trade. 7. Per contra, learned DR vehemently argued that the assessee has divided its lands into several plots and had sold those plots to several parties. The assessee has also sold the property in assessment year 2011-12 and similarly in assessment year 2012- 13. This goes to prove that the assessee had decided to transform hers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is pertinent to note that when a business asset is sold (i.e. immovable property held as stock in trade), the learned Assessing Officer could substitute stamp duty value as against the actual sale consideration in terms of section 43CA of the Act, if the actual sale consideration is less than the circle rate. But the provisions of section 43CA of the Act was introduced in the Statute only w.e.f. 01.04.2014 and applicable from assessment year 2014-15 onwards only and cannot be applied to earlier assessment years. Hence, the learned Assessing Officer was not justified in accepting the gain as business income as against capital gain. v. One more excruciating fact which prove the intention of the assessee to be an investor beyond any dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law has offered capital gains of her 50% share in the property in her return of income, which has been accepted by the revenue. Hence, there is no reason for the Revenue to take a divergent stand on the very same transaction qua the assessee herein. 9. In view of the aforesaid observations and considering the totality of the facts and circumstances of the case, we are of the considered view that the gains arising on the sale of the property to the assessee has to be taxed only as capital gains and not as income from business. Consequently, the assessee would be eligible for deduction under section 54F of the Act in respect of reinvestment of capital gains made in the house property. 10. However, in the interest of justice and fair play ..... X X X X Extracts X X X X X X X X Extracts X X X X
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