TaxTMI 
TaxTMI 
2018 (6) TMI 351
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.... order to treat the income as adventure in the nature of trade, it is the burden of the Department to prove that the same was in the nature adventure and the learned AO has nowhere taken the view. 4. It is prayed that the view taken by learned CIT(A) as to adventure in the nature of trade may kindly be cancelled and the appellant may be granted exemption u/s. 54F as claimed in the return of income. 5. The appellant craves to add, alter, modify or substitute any ground of appeal at the time of hearing." 3. The issue raised in the present appeal is against the power of Commissioner of Income Tax (Appeals) vis-a-vis enhancement of income. The assessee is aggrieved by the order of Commissioner of Income Tax (Appeals) in treating the sale of development rights as adventure in the nature of trade as against capital gains as declared by the assessee and also assessed by the Assessing Officer. 4. Briefly stated in the facts of the case, the assessee during the year under consideration had furnished return of income declaring total income of Rs. 1,15,380/-. The case of the assessee was picked up for scrutiny. During the assessment year under consideration, the assessee sold plot at....
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....he facts, the assessee was not the owner of the Asset and only had development rights. Therefore, the question of capital gains in the case of assessee does not arise at all. He was of the view that the said income had to be brought to tax under the head 'income from other sources' and not under the head 'long term capital gains'. The Assessing Officer further observed that without prejudice, the claim of the assessee regarding 54F could not be accepted in the light of the new evidence produced by the assessee. Since the agreement for sale of flat was entered into on 28.02.2013 which was later than the period of two years as envisaged in the provisions of the Act and even where the possession of the said flat was given to the assessee on 10.03.2012 which was also later than the period of two years from the date of sale of original asset on 20.08.2008. The assessee filed his comments vide letter dated 04.01.2014 regarding investment in the new flat and vide para 4 stated that other points of the remand report were not relevant to the assessment order since all the documents were provided at the time of original assessment. 7. The CIT(A) vide Paras 13 and 14 came to the conclusion t....
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....and 14 held the income to be adventure in the nature of trade. Vide Para 15 and 16, the CIT(A) further decided that in case income is being assessed as Long Term Capital Gain, the assessee is entitled to claim deduction under section 54F of the Act. The Ld. AR pointed that the Revenue was not in appeal against the same and hence, the claim of the assessee is to be allowed under section 54F of the Act. 10. Referring to the provisions of 251(2) of the Act, the Ld. AR for the assessee pointed out that reasonable show cause had to be issued. But there was no show cause notice by CIT(A). The Ld. AR for the assessee placed reliance on the following decisions: i) CIT Vs. Rai Bahadur Hardutroy Motilal Chamaria [66 ITR 443 (SC)] ii) CIT Vs. Sardari Lal & Co. [ 251 ITR 864.(Del.)] 11. The Ld. AR for the assessee pointed out CIT(A) had no power of enhancement of income by discovering new source of income. Further, reliance was placed on the decision of Delhi High Court in the case of Gedore Tools Pvt. Limited vs. Commissioner of Income-Tax [ 238 ITR 268 (Del.)] 12. The Ld. DR for the Revenue stressed that notice in this regard was given to the assessee. Referring to the section, the Ld....
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....cumstances, was not entitled to claim deduction under section 54F of the Act. The CIT(A) gave a copy of remand report to the assessee and asked for his comments. The assessee commented on non-allowance of claim of deduction under section 54F of the Act and in respect of other points raised by Assessing Officer, the assessee stated that "other point of the remand report were not relevant to the assessment order since all the documents were provided at the time of original assessment." 14. The CIT(A) after receiving the submission of assessee, remand report of Assessing Officer and comment of assessee, went on to decide the issue as to assessibility of gain arising on transfer of development rights. It may be pointed out herein itself, the said issue of assessibility of capital gain was completed before the Assessing Officer who accepted the stand of assessee that the said gain was to be assessed as income from capital gains. There was no dispute about the assessibility of gains as income from Long Term Capital Gain. The only dispute was that whether against such gains, the assessee could claim deduction under section 54F of the Act on account of investment in new asset. In this reg....