TaxTMI 
TaxTMI 
2005 (2) TMI 759
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....t. of land from Shri Anjanappa on 3-6-1990 in consideration for developing lands etc., the total cost of such development came to Rs. 7 lakhs. The assessee also constructed small houses on the site at a cost of Rs. 2 lakhs and incurred Rs. 60,000 brokerage for sale of sites. As the property was deemed to have been purchased in 1990. In view of section 2(47) of the IT Act, the assessee indexed the cost and reduced the indexed cost. The Assessing Officer held that the assessee did not become the owner of the sites and sale value of sites was the compensation received and assessed the same under the head 'Capital gain'. The Assessing Officer also did not consider the cost of building of Rs. 2 lakhs as cost. On first appeal, the CIT(A) granted....
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....d by him. Against this, the assessee received sale proceeds of Rs. 29,83,050 from the land measuring 28,510 sq.ft. Therefore, the Assessing Officer taxed the difference as business income and not as capital gain. 4. On the other hand, the learned counsel for assessee submitted that there is no dispute that the asset was acquired during the course of business. However, the assessee received a fixed asset which was acquired as business consideration and not as stock in trade. Simply because the asset was acquired during the course of business the income on sale of the asset will still be capital gain and not income from business. Regarding ownership of the land, it was pointed out that it is not necessary that the land should be registered i....
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....50 during the relevant year to assessment year 1997-98. He computed the capital gains after reducing brokerage and cost of building from the total consider- ation received and also worked out the indexed cost land. The computa-tion was as follows : Sale consideration received Rs. 29,83,050 Less : Brokerage Rs. 60,000 Rs. 29,23,050 Less : Cost 18,447 sq.ft. at Rs. 24.55 per sq.ft. = 4,52,874 Indexed cost of land i.e. 4,52,874 × 305 182 = 7,58,937 Cost of building = 2,00,000 Rs. 9,58,937 Long-term capital gain Rs. 19,64,113 The Assessing Officer computed income on sale of property at Rs. 22,23,050 as business income and allowed the cost of development of land and cost of building. He held that he cannot allow the ind....
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....stered under the Registration Act and such arrangements confer the privileges of ownership without transfer of title. The CIT(A) further observed in para 8 of his order as under : "In a recent judgment in the case of Mr. R. Sathyanarayana, ITAT, Bangalore Bench (ITA No. 536/Bang./2000) have relied on the decision of the Hon'ble Supreme Court in the case of Mysore Minerals Ltd. v. CIT 239 ITR 775 to support their finding that the assessee became the owner of the property when he took possession of the same from BDA. They pointed out that the Hon'ble Supreme Court have held that liberal interpretation of the provisions of the Act are required when there is ambiguity and that ownership must be assigned a liberal and wider meaning. Any one in ....