2021 (1) TMI 1086

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.... or grant any other relief as the Tribunal may deem fit. 2. The issue that arose for consideration in the aforesaid appeal is as to whether the Revenue authorities were justified in treating the gain on sale of properties by the assessee which was considered by the Assessee as a long term capital gain, as giving rise to business income/short term capital gain. 3. The assessee is a salaried employee, working for IBM India Pvt. Ltd. The assessee along with one Mr. Srinivasan and Mr. K. N. Ramesh entered into co-ownership agreement dated 15.06.2002. As per the terms of the coownership agreement, the assessee and the two other persons agreed that they will do business by jointly purchasing lands. 3. On 17.09.2005, the assessee and the two ot....

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...., however, came to the conclusion that the gain on sale of land was short term capital gain for the following reasons: "8. It is abundantly clear that the income earned to the tune of Rs. 1,97,12,500/-( to be assessed in the hands of three co-owners) has to be business income. However, considering the submission of the assessee that the asset should be treated as capital asset, it has to be mentioned here that the asset became a capital asset only after conversion from agricultural to industrial land as per the provisions of Sec.2(47)(iv), the relevant portion of the I.T.Act is reproduced as under: "in a case where the asset is converted by the owner thereof into or is treated by him as, stock-in-trade or business carried on by him, su....

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....oner of Income Tax (Appeals) erred in holding that, the appellant is not eligible for exemption U/s.54F of the act. 6. The Learned Commissioner of Income Tax (Appeals) erred in holding that, the asset became a capital asset only after conversion and the period of holding for the purpose of determining the period of three years, the date of conversion should be considered as date of acquisition and on the contrary this is not the position of law, original date of acquisition continues to be the date of acquisition. 8. The Tribunal in its order did not deal the grounds 5 and 6 as extracted above but only dealt with the issue as to whether the gain in question would give rise to income from business or income under the capital gain. Para ....

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....ership agreement entered into in June 2002 and as per this co-ownership agreement, this is the business of this coownership to have joint purchase of land and the net income of the coownership after deduction of all expenses is to be shared by the co-owners in accordance with the manner provided in the co-ownership agreement, nothing further is required to be seen and it can concluded without any hesitation that the income arising on purchase and sale of land in pursuance to this co-ownership agreement is taxable as business income and this is not relevant as to whether any other activity was done by the co-owners on the land purchased or in any other manner. We conclude accordingly." 9. In this MP, the assessee has submitted there are so....