TaxTMI 
TaxTMI 
2021 (7) TMI 20
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.... 2011-12. The issue involved in these appeals is related to computation of long term capital gain arising from transaction of sale of rights as per Joint Development Agreement (JDA). 2.0 Brief facts of the case are that the assessee was the owner of 43 acres of land situated in sector 38, Gurgaon, Haryana allotted by HUDA. The assessee entered into a Joint Development Agreement dated 02/08/2007 with M/s. SAS Infoetech P. Ltd. for development of 5 acres of land of the aforesaid 43 acres of land. The said development was to be carried out wholly by M/s. SAS Infoetech P. Ltd from its own resources on or before the completion date of 1st September, 2010. It was further agreed in the agreement that upon the completion of the said development, t....
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...., are in appeal before this Tribunal and have raised the following grounds of appeal respectively: Grounds of appeal in ITA No.4237/Del/2017 (Assessee' Appeal): "The learned CIT (A) erred in fact and in law in allowing indexation cost of acquisition till A.Y.2008-09 instead of A.Y. 2011-12 as claimed in the return." Grounds of appeal in ITA No.4871/Del/2017 (Department's Appeal): "1. In the facts and circumstances of the case, the Ld. CIT (A) has erred in directing to take the indexed cost of acquisition to be worked on proportionate basis while computing the capital gains by ignoring the fact that the assessee did not reduce the said proportionate cost from the cost of land in its books of accounts. 2. The appellant craves le....
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....at since the taxable event arose in AY 2011-12, the benefit of indexation was also to be made available till AY 2011-12, i.e. year under reference. 4.0 On the other hand, the Ld. CIT DR argued that benefit of cost of acquisition was not available as the assessee continued to be the owner of the land. Our attention was drawn to the Fixed Asset Schedule of the Balance Sheet and it was pointed out that there was no reduction in the value of the land appearing therein. The Ld. CIT DR, while placing reliance on the assessment order, argued that the entire amount of Rs. 33 crores was taxable as long term capital gain and that there was no question of any adjustment of cost or indexation of the same. 5.0 We have considered the rival submissions ....
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....f the assessee would not have any adverse implication on the computation of long term capital gain as the accounting treatment in the books of account cannot override the determination of real income under the provisions of Income Tax Act, 1961. In view of the above, we find no merit in the ground raised in the revenue's appeal and same is dismissed. 5.1 On the issue of indexation of cost, it is observed that the Ld. CIT (A) has restricted the indexation on the ground that there was conversion of capital asset into stock-in-trade in terms of section 45(2) of the Act in AY 2008-09 i.e. upon execution of the Joint Development Agreement and as such the benefit of indexation was allowed only till AY 2008-09. Firstly, we will deal with the obse....
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.... not justified in imputing a commercial angel to the whole transaction for the purpose of invoking section 45(2) of the Act. 5.2 At this juncture would be relevant to make a reference to the bare provision of section 45(2): "Section 45 - Capital gains 2) Notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment ....