TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 710
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....al Gain of Rs. 3,51,17,040/- declared by the assessee in the return of income, without appreciating material facts of the case." Due to the prevailing situation of COVID 19 pandemic, the hearing of the appeal was concluded through Video Conference. Ground No. 1 is regarding an addition of Rs. 1,01,774/- made by the AO on account of cash deposit in the bank account of the assessee was deleted by the LD. CIT (A). 2. The assessee is an Individual and running a Hospital in the name and styled as M/s. Mayuri Surgical Hospital. The assessee has filed his return of income on 14.10.2016 declaring total income of Rs. 3,80,07,400/- including Long Term Capital Gain of Rs. 3,51,17,040/-. During the course of assessment proceedings, the AO noted that the assessee has deposited cash of Rs. 2,90,000/- in the Central Bank of India whereas on the said date i.e. 16.11.2015 there was a negative cash balance in the cash book of Rs. 1,01,773.84. The AO accordingly made an addition of Rs. 1,01,774/- under section 69 of the IT Act read with section 115BBE of the IT Act. The assessee challenged the action of the AO before the LD. CIT (A) and submitted that the AO has made the addition without giving hi....
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.... on the issue is allowed." Thus the entries made in the cash book from 14.11.2015 to 17.11.2015 were considered by the LD. CIT (A) and it was found that it was only a genuine mistake on the part of the Data Entry Operator who has made the entry of 17.11.2015 instead of 16.11.2015. In view of the above facts as discussed by the LD. CIT (A) and no contrary material brought before us, we do not find any error or illegality in the impugned order of LD. CIT (A). Ground No. 2 of the revenue's appeal and ground in the Cross Objection are common regarding the Long Term Capital Gain declared by the assessee was treated as Business income by the AO and subsequently bifurcated by the LD. CIT (A) into Long Term Capital Gain as well as Business income as per provisions of section 45(2) of the IT Act. Thus the revenue as well as the assessee are aggrieved by the order of LD. CIT (A) and filed respective appeal and cross objection on this issue. 4. The ld. D/R has submitted that the assessee has shown the Long Term Capital gain on sale of various plots and shops after claiming deduction under section 54F. Since the assessee has developed a residential colony and divided the land into 102 resi....
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....Gain as the assessee purchased the land as an investment and at the time of sale it cannot be treated as business activity. He has relied upon the decision of Hon'ble Jurisdictional High Court in the case of Sohan Khan & Mohan Khan, 304 ITR 194 (Raj.). 6. We have considered the rival submissions as well as the relevant material on record. The undisputed fact as emerging from the record is that the assessee purchased the agricultural land in question in the year 2000-01. During the year under consideration, the assessee has sold various plots of land and the description of the land given in the sale document clearly reveals that what is sold by the assessee is residential plot to each buyer. Therefore, undisputedly the assessee has developed the land into a residential colony by carving out 102 residential plots, ear-marking the plots as A, B, C, D, E, F, G, H, I, J, K as well as number of the plots. This exercise of the assessee, whereby the assessee has prepared a lay-out plan and which has been executed on the ground the plots have been carved out as per the lay-out plan and the map under which a proper residential colony is developed. Therefore, the plots are sold by the as....
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....nto capital gain as well as business profit. The LD. CIT (A) has applied the fair market value for the purposes of arriving at the capital gain and the difference of the sale consideration and the fair market value is treated as Business income of the assessee. The relevant finding of the LD. CIT (A) on this issue is in para 5.3 as under :- " 5.3. I have perused the assessment order as well as submissions filed by the appellant including judicial citations given therein. Following facts have emerged: 1. That the appellant had purchased agricultural land vide registered deed dated 27.09.2000 & 12.02.2001 for an amount of Rs. 3,73,234/- . 2. That in the year 2015-16, the appellant had divided the agricultural land into small plots and developed a colony under the name of Mayuri Nagar Colony. 3. That the appellant had also constructed shops on the land for sale. 4. That after plotting has been done, the appellant has started selling the plots. Such plots were sold during the year under consideration and declared the income as long term capital gain. 5. That the AO had considered the income arisen out of the above mentioned sale as business income by treating it as 'busines....