Kajal Co-op Housing Society Limited Vs ITO (ITAT Ahmedabad)
Assessee, Kajal Co-operative Housing Society Ltd, engaged in development & sale of residential plots, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi for AY 2013-14.
AO treated the sale proceeds of land/plots as capital gains, applying Section 50C for valuation substitution, & made an addition of ₹1,10,76,786 on the difference between the sale consideration & the stamp duty value. The AO also denied deduction for development expenses & added interest income of ₹81,900 to total income.
Before the CIT(A), the Assessee contended that:
- Plots were stock-in-trade & not capital assets, & therefore Section 50C had no application.
- Gross receipts were wrongly taxed without allowing deduction for development expenditure.
- AO himself had accepted certain reliefs in the remand report, which the NFAC ignored while confirming the assessment.
However, the NFAC confirmed all the additions & upheld the assessment without properly analysing the nature of the property or the factual findings in the remand report.
Tribunal’s Observations/Decision
Tribunal noted that the issue of whether the plots constituted stock-in-trade or capital asset was not examined objectively by the lower authorities. CIT(A) merely concurred with the AO’s view without properly appreciating the submissions, supporting documents, & the remand report.
