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2021 (3) TMI 819
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.... and in law, the CIT(A) is correct in allowing the deduction u/s 54EC from the business income of the assesse? 3. Without prejudice to the above, whether in the facts an circumstances of the case and in law, the ld. CIT(A) is justified in holding that the land to the extent of 35% only is transferred whereas entire land has been transferred to the developers for which the assesse has received consideration of 65% of constructed area. Hence, on given facts, whether the ld. CIT(A) was not required to direct the computation of capital gains on the sale consideration pertaining to 65% of the constructed area i.e. 19916.83 Sq.ft? The appellant craves its right to add, amend or alter any of the grounds on or before the hearing." "Grounds of assessee's C.O.: 1. In the facts and circumstances of the case and in law, ld. CIT(A) has erred in holding that for the purpose of computing Long Term capital gain and short term capital gain, deduction of cost is to be worked out on the basis of floor-wise valuation according to stamp/revenue authorities. The directions of the ld. CIT(A) are contrary to the legal position in this regard for the determining the inde....
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...., Cir-2, Alwar, ITA No. 930/JP/2016 dated 27/02/2018 and (ii) ITO, Dausa Vs Sh. Ram Swaroop Saudagar, ITA No. 329/JP/2017 dated 22/02/2018. 6. On the other hand, the ld. AR appearing on behalf of the assesse has reiterated the same arguments as were raised before the ld. CIT(A) and also relied on the impugned order. The ld. AR has also submitted that the case laws referred to by us including the decision of the Jurisdictional High Court in the case of CIT v. Sohan Khan Mohan Khan 304 ITR 194 (Raj.) have been found to be directly applicable in this case. The ld. CIT(A) after appreciating the fact of terms & conditions of the Development Agreement contained in paras 10. 11, 12, 13 and 14 and appreciating the legal position has held the gain to be chargeable to tax under the head Capital Gains. The ld. AR has further submitted that ld. CIT(A) has appreciated the following facts: (i) The land was not purchased by the assessee but was inherited by the assessee from his father on 11/04/1994. Development Agreement was entered into even after lapse of around 12 years thereafter in 2006. (ii) Merely sale without purchase cannot result into business. (i....
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.... section 54EC on account of investment in bonds. Thereafter, the assessee revised the return of income and offered long term capital gain of Rs. 5,23,66,528/- and short term capital gain of Rs. 13,11,857/- arising out of assessee's parting with 35% of land to the builder, as well as direct sale (as per page no. 95 to 99 of paper book filed by the assessee). Assessing Officer observed that since the assessee has entered into developer agreement and therefore assessee is engaged in real estate business. Accordingly, on the value of 35% of land transferred to builder income is assessable under the head business. He worked out the area sold to the builder at 692.60 Sq. yd. On this, by DLC rate, he worked out total value at Rs. 5,05,80,470/- and after allowing deduction for proportionate land cost the business income is computed at Rs. 5,03,81,694/-. The Assessing Officer also observed that out of 65% of his share, the assessee has sold 4129.37 Sq. ft. to the builder and 367.74 Sq. ft. sold to other person for Rs. 24 Lakhs. The stamp authority valued the same at Rs. 29,14,062/-. On this basis Assessing Officer worked out rate of 7925 Sq. ft. On th....
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....constructed areas in exchange for land, it is held that land underneath this constructed area is to be treated as long term, being held by assessee for more than 36 months and the buildup area as above, shall be short-term, as claimed. Cost of acquisition shall be allowed in the proportion of built up area sold/surrendered to builder as bears to total built up area acquired by assessee from developer in lieu of 35% land. In 3rd issue, the assessee is whether deemed sale value of land transferred and value of constructed area transferred is to be taxed or not as such constructed area was received in exchange of 35% land only. On perusal of the order it is seen that the Assessing Officer considered only the area transferred to the builder i.e. 4129.37 Sq. ft. and not the total area. Since, the assessee transferred these constructed areas to the builder the same is liable to be taxed. On such sale, income is to be computed under the head capital gain comprising of long term capital gain on property land area and short term capital gain on constructed area. Against this, the Assessing officer only took the estimated sale value as per DLC rate at Rs. 3,27,25,257/- with....
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....an (supra) we also found that in the present case, there is nothing to show that the land was purchased with the intention to sell at a profit or with requisite intention to bring it within the para meters of "stock-in-trade". Further it is not shown that the assessee is a regular dealer in real estate. Rather, it appears that the land was not purchased by the assessee, but was inherited by him from his father and the development agreement was entered into even after lapse of around 12 years thereafter. As per the Development Agreement, the developer had all the obligation of execution of work. Even the assessee was debarred from interfering in the working of the developer. On the contrary, no funds of the assessee were deployed rather he received security deposit from the developer. Therefore, after considering the terms and conditions as contained in Development Agreement and following the decisions referred above, we are also of the view that the gains in the present case is to be chargeable to tax under the head "capital gains". 9. The ld. DR had also relied upon the decisions of the Coordinate Bench of this Tribunal in the cases of Sh. Pradeep Vantrana Vs DCIT, Cir-2, Alwar....
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....e short-term, as claimed. Cost of acquisition shall be allowed in the proportion of built up area sold/surrendered to builder as bears to total built up area acquired by assessee from developer in lieu of 35% land. The ld. CIT(A) has further held that in 3rd issue, the assessee is whether deemed sale value of land transferred and value of constructed area transferred is to be taxed or not as such constructed area was received in exchange of 35% land only. On perusal of the order it is seen that the Assessing Officer considered only the area transferred to the builder i.e. 4129.37 Sq. ft. and not the total area. Since, the assessee transferred these constructed areas to the builder the same is liable to be taxed. On such sale, income is to be computed under the head capital gain comprising of long term capital gain on property land area and short term capital gain on constructed area. Against this, the Assessing officer only took the estimated sale value as per DLC rate at Rs. 3,27,25,257/- without any deduction of cost which is wrong. Considering the totality of facts and circumstances, we found that the ld. CIT(A) has passed a speaking and reasoned order discussing all the details....