Case Law Details
Shri Laxmanbhai Balchanddas Patel Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that treating transaction of sale of land as business income without any base which indicates that the transaction would be an adventure in the nature of trade is not justified. Hence, AO rightly treated sale of land as capital gain.
Facts- PCIT invoked provisions of section 263 of the Income Tax Act alleging that AO had wrongly allowed assessee’s claim of profit earned from the sale of land as assessable under the head “Capital Gains” and consequently allowed deduction under Section 54EC of the Act to the assessee resulting in Nil capital gain being charged to tax, when the said gains ought to have been assessed as business income of the assessee without allowance of any deduction/exemption against the same.
Being aggrieved against the order of PCIT, the present appeal is filed by the assessee.
Conclusion- Held that there is no basis with the Ld. PCIT to hold that the facts relating to the transaction in sale of land were indicative of the same being in the nature of adventure in the nature of trade and the AO having accepted assessee’s claim of returning capital gains on the same was an error on his part.
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