TaxTMI 
TaxTMI 
2021 (2) TMI 534
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....hich was trading asset of the assessee only on the ground that inadvertently/on account of typographical error that the said asset was shown as fixed asset in the balance sheet of earlier years ignoring the documentary evidences produced to the effect that it was trading asset only. 2. Without prejudice to the above the appellant submits that the Ld. CIT(A) has seriously erred in ignoring the ratio laid down by various courts which are of binding nature up on them to the effect that mere entry in the books of accounts does not decide the nature of income when other circumstances clearly supports assessee's contention. 3. The appellant craves leave to add, amend, alter or vary any of the grounds at the time or before th....
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....ical Appliances. That in this agreement no business activity was mentioned against business and developers. That a stamp paper was purchased on 11.03.2013 for amendment in partnership deed under the name of Nancy Traders wherein the signature was executed adding builders and developers, dealing in real estate, dealers in sale and purchase of TDR (Transfer of Development Rights) also as nature of business for Nancy Traders. That subsequently, the said plot was sold out on 26.11.2014 before 36 months. That the profit/gain of Rs. 2,44,32,077/- has been credited in the profit and loss account as profit on sale of plot. The net profit of Rs. 2,44,49,627/- has been set off with brought forward business loss of Rs. 15,97,358/- and brought forward ....
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....ed assets. The auditor himself has supported the stand of the assessee that the said asset is a fixed asset. So, it is difficult to believe that this was an inadvertent error. The assessee has heavily relied upon the decision of jurisdictional Bombay High Court in M/s. Sanchit software and Solutions Pvt. Ltd. V/s CIT 8 and others in writ petition no 783 of 2012 dated 07/09/2012. The said decision is not covering the assessee's case since there is no inadvertent error, but a well thought after and conscious decision to put the asset under Fixed asset. Also the other judicial pronouncements relied upon by the assessee are not applicable in the instant case since the present case is taxability of a transaction shown as per the audited fina....
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....rtnership deed (page no. 34 of paper book) and on 01/4/2013, appellant firm amended the partnership deed wherein they appended the business activities that of builders and developers, dealing in real estate, dealers in sale and purchase of TDR (Transfer of Development Rights) (page no. 35 of paper book). (c) On 16/7/2013, appellant firm purchased a land for a consideration of Rs. 88,75,000/-, the total cost of which including the expenditure thereon, was Rs. 1,10,99,954/-, (d) While finalizing the books of accounts as on 31/03/2014 (relevant to A.Y 2014-15) the year in which the land was purchased, the land under consideration is shown under the head fixed assets (page no. 84 of paper book), (e) Appellant firm has sold the said land, vide a....
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....o builders. He also raised the contention that, the assessing officer has not commented a word on this issue but has simply held it to be a capital asset only due to an inadvertent error having been made while finalising the books of accounts, for earlier year. The A.R of appellant has relied upon on various judgements in support of his contention that mere entry/treatment given by appellant to a particular transaction does not and/or is not conclusive in determining the actual nature of transaction." 9. However without making any discussion on the assessee's submission he confirmed the Assessing Officer's action and held as under:- "In view of the above discussions, as also bearing in mind entirety of the case,....
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....the deed that the assessee was also dealing in the business of real estate developer. In these circumstances when the said land was sold the revenue authorities have tried to thrust upon the assessee that the said sale of land resulted in short-term capital gain. This has been done solely on the ground that assessee has classified the said land as fixed asset. It is settled law that description in the books of account is not the determinative of the true nature of the transaction. The fact that the partnership deed has been duly amended bringing into account the fact that assessee was dealing in the business of real estate developer prior to the purchase of land and that the tax audit report also showed the assessee to be in the said busine....