TaxTMI 
TaxTMI 
2013 (12) TMI 946
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....th other family members purchased the property situated at Village Poiser, Talukar Borivali in year 1992 and 1993; (b) that there are total 7 parts of the said property, out of the 7 parts, the assessee had purchased 2 parts, as under: Name of Vendor Lilawati Krishnarao Raut Mankbai Pandharinath Date of agreement 10.04.1993 06.06.1992 Agreement value Rs. 8,90,000/- Rs. 8,90,000/- Total consideration paid till dated (a) Rs. 1,75,000/- Rs. 1,75,000/- Other cost incurred for above property (b) Rs. 3,500/- Rs. 3,5000/- Total (a + b) Rs. 1,78,500/- Rs. 1,78,500/- (c) that section 50C is not applicable to the facts of the case because the rights in the said property have been purchased for the development which is the business of the assessee; (d) that in the past also several properties were purchased and sold by the assessee and had been treated as stock in trade or profit/loss on the said property had been determined; (e) that the assessee has always treated this property as stock in trade and rights in the said property have been transferred as stock in trade only, therefore, the....
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....order, but we do not consider it necessary to reproduce the same. It is suffice to state that the AO has stated that the assessee jointly with other co-owners were in legal possession of the property and each part thereof; (c) that the contention of the assessee that he has transferred the property to M/s Jajodia and Patel Properties to come out of prolong litigation is not acceptable because one of the partners of M/s Jajodia and Patel Properties is Shri Dushyant C. Patel, who is the son of the assessee; (d) that the contention of the assessee that the said property is neither transferred to him nor full consideration paid for acquisition of the property and there was no transfer of immovable property but only transfer of right is not acceptable and for this purpose the AO has referred to said agreement dated 16th June, 2006. He has stated that as per agreement, the balance amount of Rs. 48,40,000/- payable by the assessee and other co-owners to the earlier owners were paid by M/s Jajodia and Patel Properties. Therefore as such full consideration had been paid by the assessee and other co-owners for the acquisition of the property. The AO has stated that the asse....
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.... to act as a builder and developer. The Ld. CIT(A) has stated that these properties have been shown and reflected as stock in trade over several years, which is never disputed by the AO. He has stated that assessment order for assessment year 2006-07 passed by the AO on 24th December, 2008 and he has scrutinized and examined the nature of the activity of the assessee and the nature of other development rights held by the assessee. While examining the nature of such rights as to whether it is current asset or stock in trade, the AO made following observations: "4.3 The perusal of the above definition of capital asset clearly indicates that any property connected with the business is not a capital asset. The said development right has been purchased by the assessee for his business of development of property. However, they have sold the said rights due to their business prudence. Thus, the assessee has throughout considered the said rights as their stock-in-trade for the business of development of property". The Ld. CIT(A) has stated that the AO has held, after examining the activity of the assessee, that the assessee carrying on the business as a 'developer'. 6.1 That....
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....y, the assessee was unable to develop the property and hence decided to get rid of the property itself comes out of the litigation. The Ld. CIT(A) has stated that the purpose and intention with which the property was acquired and the manner in which the said property was reflected in the accounts clearly shows that the property has all the attributes of stock in trade. 6.2 The CIT(A) has stated that, under the circumstances, he is of the view that the findings of the AO that the asset is a capital assets and not stock in trade are contrary to the facts borne out from records. The Ld. CIT(A) further stated that the said property was a part of the current assets as per trial balance for AY 2000-01 and thereafter. Even during assessment year 2005-06, the said assets were reflected as a part of the current assets. The Ld. CIT(A) has stated that the assessee explained that due to accounting error, the assets were not reflected in the trial balance in the A.Y. 2006-07. However, the said property was not sold during assessment year 2006-07 nor the AO raised claim that the property was sold during assessment year 2006-07. Hence, the objection raised by the AO has no locus standi. 6.3....
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.... assessee and others with M/s Jajodia and Patel Properties as well as copies of the trial balance, copy of the order of the City Civil Court, Bombay dated 20th October, 1993 and written submissions filed by the assessee before the authorities below. 9. We observe that the Ld. DR has not disputed the fact that the assessee has disclosed the property in trial balance for all the years from 2000-01 to 2005-06 as part of stock in trade. We also observe that during the course of assessment proceedings for earlier year i.e. assessment year 2006-07, the AO, himself observed that the assessee was in the business of construction and development rights purchased by the assessee is part of stock in trade. On perusal of the relevant pages of the paper book, placed before us, we agree with the Ld. AR that the property was affected with innumerable court proceedings and the assessee could not get possession of the said property till the date the assessee transferred his rights in the said property to M/s Jajodia and Patel Properties, vide agreement dated 16th June, 2006, copy of which is placed on pages 52 to 90 of the paper book. 10. The above fact is also emphasized that the assessee was....