TaxTMI 
TaxTMI 
2017 (10) TMI 993
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....n facts and in law in confirming the addition of Rs. 40,02,248/- as business income, in place of following capital gains earned on sale of immovable properties: a) Long term capital gain Rs.28,88,686/- b) Short term capital gain Rs. 3,66,526/- Total Rs.32,55,212/- 3. i) That the Ld. CIT(A) has again erred on facts and in law in dismissing the claim for capital loss of Rs. 1.52.302/- on extinguishment of investment in equity shares, as the~name of the company was struck off by the promoters, giving no compensation to the share holders. ii) That the Ld CIT(A) has erred in not regarding extinguishment of rights of the appellant in the equity shares as transfer of capital asset. 4. That the Ld. CIT(A) has erred in confirming lum....
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....pital gains earned on immovable property, the brief facts of the case as emanating from the order of the Assessing Officer are that r'4. On perusal of the Audit Report u/s 44AB of the Income I ax Act. 1961. Form No. 3CB assessee is proprietor of M/s Homz R I Js. on further perusal of Form No. 3CD, Para No. 8(a) the nature of business of the assessee is shown as (i) Sale and purchase of Properties and (ii) Property Dealer and Direct Selling agent. In view of the above facts, it is evident that the assessee is a property dealer and involved in the business of purchase and sale of properties. During the course of assessment proceeding, it is noticed that the assessee has acquired 6903.85 square yard area involving 19 plots of different mea....
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....s not depend upon the nature of the article, but the manner in which it is held. The same item may be stock- in-trade m the case of an assessee who deals in that item but it will be capital asset in the case of an assessee who uses it for earning income. Even stock-in-trade may become capital asset in certain circumstances and vice versa. If an assessee who deals in certain goods or commodities as trader, on closure of the business, retains the existing stock as investment, the stocks will become capital asset in his hands from the time of closure, not withstanding that they were stock-in-trade earlier in his hands. 6. Even in the course of a business, an assessee may try to transfer same of the stock-in-trade from his trading activity and....
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.... a view to selling it later after developing it and actually divided the land into plots and sold the same in parcels, the activity could only be described as a business adventure. Generally speaking, the original intention of the party in purchasing the property, the magnitude of the transaction of purchase, the nature of the property, the length of its ownership and holding, the conduct and subsequent dealings of the assessee in respect of the property, the manner of its disposal and the frequency and multiplicity of transactions afforded valuable guides in determining whether the assessee was carrying on a trading activity and whether a particular transaction should he stamped with the character of a trading adventure. Cher uk uri Rame....
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...., perused the orders of the A.O and the ld. CIT(A) and the paper book filed on behalf of the assessee. It is an admitted fact which has not been controverted by the ld. counsel for the assessee that the auditor 'Sr. \No Details Property oj Area (in yards) Rate per square yards including Registration expenses Purchase Price as per deed including Registratio nexpenses Sale Price as per deed Difference 1 Plot No. Amritsar 227 500 2268.15 11,34,077/- 15,50,000/- 4.15,923/- 2 Plot No. Amritsar 244 500 2268.15 11.34.077/- 15,50,000/- 4,15,923/- 3 Plot No. Amritsar 219 287.77 2268.15 6.52.706/- 6.04,500/- (48,206/-) D 200 Basement Defence Colony, New Delhi 325 Not Mentioned 11,83,QQQ/ 40.00,000/ .28.12.000/- TOTAL 35,95,640/ of the assessee, a....
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....filed, not placed on record showing the said plots as investment as per valuation to be made under the wealth tax rules. This goes to prove that the assessee is carrying on the business of purchase and sale of properties and is a property dealer-direct selling agent holding assets as stock in trade and not as investment. Accordingly, I find no infirmity in the order of the ld. CIT(A) who has rightly confirmed the action of the Assessing Officer. Ground No. 2 of the assessee is dismissed. 12. As regards Ground No. 3, the ld. CIT(A) observing that no transfer of assets is involved in the present case and also the appellant has not been able to adduce any evidence to prove his case, dismissed the claim of capital loss amounting to Rs. 1,52,30....