TaxTMI 
TaxTMI 
2014 (10) TMI 978
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....9-10. 2. Since the facts and issues involved therein are identical in nature, hence the same are taken together for disposal with this common order. First we take up the Revenue's appeal. ITA No.6138/M/2012 3. The Revenue, through its grounds of appeal, has agitated the action of the ld. CIT(A) in treating the rental income of Rs. 4.6 crore received by the assessee on letting out the unsold stock as "Income from house property" instead of "Business income" and further, the allowing of deduction under section 24 of the Act to the assessee. 4. At the outset, the ld. A.R. of the assessee has brought to our attention that the issue relating to income from the unsold stock of premises in Mayfair Towers has already been settled by the co-ord....
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.... profit arising from sale thereof is Capital Gains and not Business Income. 2. The Learned CIT(A) erred in holding that the appellant had changed in its books the assets from s tock in trade to inves tments to claim the gains arising from the sale as exempt from tax without appreciating the fact that the Long Term Capital Gains oil of property is not exempt from tax and is liable to be taxed @ 20% which the appellant had already paid. 3. The appellant therefore prays that the profits arising from sale of commercial premises he treated as Long Term Capital Gain and the capital gain be computed in accordance with the provisions of section 48(i) and 48(u) of the Income Tax Ac t, 1961. 4. Each of the above grounds of appeal are independen....
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....ing Officer (hereinafter referred to as the AO), however, observed that the assessee partnership firm was engaged in the business of acquiring lands and flats for development and resale, to act as promoters, builders and developers of residential and commercial buildings and scheme, deal in real estate, carry out of construction of commercial, residential or industrial complexes and was engaged in all other activities as may be incidental to the above said activities. He further observed that as per the partnership business of the assessee firm, the firm had entered into an agreement of development dt.14/7/1992 with the Trustees of Ramkorebai & Laxmibai Hindu Sanitorium to develop the land on which these two buildings namely Mayfair Tower I....
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....ated the income from the said sale as business income of the assessee. 9. In appeal, the ld. CIT(A) observed that the mere change of heads of income in the balance sheet would not change the character of the object i.e. the building in this case. The premises were constructed and developed by the assessee in pursuant of its business endeavors as mentioned in the partnership firm deed. The main business of the assessee was of a builder and developer. The assessee had developed the entire building with the intention to hold the property as stock in trade. The change in the books of accounts from stock in trade to investment was made before the sale of property to avoid payment of full taxes by changing the nature of the property. The ld. CIT....