DCIT Vs Hanuman Tubewell Co (ITAT Jaipur)
ITAT Jaipur held that capital gain on sale of land as covered under the provisions of section 50C of the Income Tax Act is to be assessed separately.
Facts- Assesse has preferred the present appeal contesting that CIT(A) has erred in taxing capital gain Rs. 2,42,38,984/- from agricultural land as income from capital gain whereas agricultural land sold is not capital asset as per section 2(14)(iii)(b) of the Act and therefore not liable for capital gain under section 45 of the Income Tax Act.
Conclusion- CIT(A) held that In the assessment order, the AO has highlighted that the assessee had shown the receipts in the credit side of P&L a/c as gains from sale of land. Thus from the perusal of the basic details itself it is seen that the stand of the assessee is contradictory and now it is resorting to alternate claim of land being agricultural once the AO excluded its being utilized to set off the business losses in the assessment order.
The DLC of the land was Rs.2,81,89,384/- the same is found duly covered by the provisions of Section 50C and the only relief available is in terms of cost of acquisition and its indexation. If the AO has considered the gains, the asset could not be without any cost. If the cost of Rs.6,06,265/- taken by the assessee as duly indexed to Rs. 13,74,016/- is duly considered as reasonable and is required to be deducted from the DLC rate of Rs.2,81,89,384/- for determination of capital gains in this case. The long term gain comes to Rs.2,68,15,368/-and is being upheld to be assessed separately as done by the AO correctly.
Bench accepted the order of ld. CIT(A).
FULL TEXT OF THE ORDER OF ITAT JAIPUR
Both these appeals are the cross appeals filed against order of the ld. CIT(A)-Kota dated 13-03-2019 for the assessment year 2014-15 wherein the Department as well as Assessee has raised the following grounds of appeal.
“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in applying NP rate of 8% as against 11% applied by the AO (which is based upon N.P. rate disclosed by the assessee in past 7 years) without any basis despite accepting application of provisions of section 145(3)?
2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing relief by way of treating FDR interest as part of business turnover relying on the Hon’ble Rajasthan High Court’s decision in the case of M/s Choudhary & Brothers which is contrary to the facts of the case under consideration?
3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting disallowance of interest payment to partners as interest bearing funds were not utilized in purchases of business assets as demonstrated by list of non business assets?
4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing relief on the issue of depreciation of “Matasukh project’s plant and machinery wherefrom no receipts were disclosed or any details of plant and machinery put to use where provided?
ITA No. 866/JP/2019 – Assessee
“1. That on the facts and in the circumstances of the case Ld. CIT(A), Kota has grossly erred in law and facts in confirming net profit @ 8% on the turnover of Rs. 4,53,03,064/- whereas correct turnover of gross receipts is Rs. 3,09,79,582/-+ by sales Rs. 16,72,232/- ( Total Rs. 3,26,51,814/-).
2. That on the facts and in the circumstances of the case Ld. CIT(A), Kota has grossly erred in law and facts in confirming rejection of audited books of accounts maintained in regular course of business and further applying net profit of 8% on contract receipts. Subject to depreciation, interest and remuneration to partners and third party interests was disallowed by him.
Details of Deduction
