Case Law Details
Vasant Haribhau Gaikwad Vs ITO (ITAT Pune)
ITAT Pune held that income derived from twin land transactions deserves to be treated as ‘business income’ and cannot be treated as ‘capital gains’.
Facts- From a perusal of the assessment order herein dated 31.03.2016 it appears that AO have reduced the assessee’s cost of acquisition regarding the former capital asset sold in this year and further held regarding the latter parcel of land. There is hardly any issue that this taxpayer had been indeed sold/ transferred the above former asset in the relevant previous year on 05.01.2013. It is in this factual backdrop that AO went on to disallow/add the assessee’s cost of acquisition of the instant former asset to the tune of Rs.25,72,000/- and assessed the sale consideration of the latter asset as short term capital gains to the tune of Rs.1,01,00,000, respectively.
Conclusion- Held that the assessee is only entitled for the cost of acquisition coming to 1/3rd share in Rs.58 lakhs + expenses involving the vendors S/Shri Mahadev Tulshiram Gaikwad etc. (supra) than the latter one u/sec.37(1) of the Act. We order accordingly and direct the Assessing Officer to grant him the impugned deduction to the extent of 1/3rd of Rs.58,00,000/- + Rs.21,500/- + Rs.2,32,010/- + Rs.30,980/- or that actually paid by assessee; whichever is lower, in very terms.
We hardly see any justification in Revenue’s stand once the assessee was neither incorporated as the registered owner in possession in the Revenue record nor he had carried-out any sale transaction in the impugned assessment year in light of the preceding facts on record. This is more so in light of the fact that the Assessing Officer had assessed the impugned sale consideration of Rs.1.10 crores under the head “capital gains” as upheld in the CIT(A)’s order u/sec.2(47) of the Act which is not applicable once “business head” has come into play as per the CIT(A)’s directions. We thus accept the assessee’s arguments regarding the instant second substantive issue that both the learned lower authorities have erred in law and on facts in assessing him for alleged profits from sale of land in Sy.No.129/2 in question. Ordered accordingly.
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