Case Law Details
JCIT (OSD) Vs Adrus Estate and Properties LLP (ITAT Pune)
It is an undisputed fact that the land was recorded in the books of account as part of investment. It is settled position that the treatment given in the books of account gives an indication as to the intention of the assessee to hold asset as an investment or stock-in trade. In the present case, the fact that the said land was shown as part of investment in the books of accounts coupled with the fact that the land was sold after a gap of six years would prima facie go to show that the intention on the part of the respondent / assessee is to hold the said land as “investment”. It is settled position of law that the onus lies upon the Department for bringing the relevant material on record to prove that the transaction is an adventure in nature of trade. In the present case, the inference drawn by the Assessing Officer that the subject transaction is in nature of trade is not based on any material on record. The Department had failed to prove the allegation that the transaction is in the nature of adventure of trade. Whether holding of a particular asset is by way of investment or forms part of stock-in-trade is a matter which is within the exclusive knowledge of the assessee and it should be in a position to produce evidence from the records.
In the instant case, undisputedly, the intention of the parties apart from the treatment given in the books of accounts i.e., as investments, there is no material brought on record by the assessing authority to indicate that the land was purchased by the assessee with an intention to resale for profit. On the other hand, the intention of the parties clearly demonstrated in the form of treatment given in the books of accounts. Therefore, there is nothing on record to infer the contrary and the facts of the present case are identical to the case of Baguio Investments Pvt Ltd (supra) wherein the Hon’ble jurisdictional High Court has confirmed the findings of the Tribunal that the land forms part of the investment and the land was held for a period of 10 years. Thus, the decision of the order of Ld.CIT(A) is based on the proper appreciation of the facts and in consonance with the settled position of law. Therefore, we do not find any reason to interfere with the findings of Ld.CIT(A) that the profits arising on sale of land should be assessed as Capital Gains.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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