TaxTMI 
TaxTMI 
2022 (1) TMI 243
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....the Commissioner of Income Tax (Appeals), Puducherry dated 11.12.2018 in I.T.A.No.56/CIT(A)-PDY/2015- 16 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the assessment resulting in the re-computation of the taxable total income at Rs. 81,97,060/- without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that the re-computation of taxable total income as per the assessment order on various facets was wrong, erroneous, unjustified, incorrect and not sustainable in law. 4. The CIT (Appeals) erred in adopting the stamp duty value for converting\ e agricultural land into housing plots wh....
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....of assessment proceedings, the Assessing Officer noticed that the assessee has admitted income from real estate business and thus, called upon the assessee to file necessary evidence. In response, the assessee has filed various details and submitted that she had purchased 10.315 acres of agricultural land at Marutheri Village, Kanchipuram in the year 2007 and same has been converted into stock in trade as on 01.04.2011 to exploit asset for commercial purpose and thus, derived income from sale of plots to be assessable under the head income from business. The Assessing Officer after considering relevant facts and has also taken note of value adopted by the assessee for conversion of capital asset into stock in trade as per provisions of sect....
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.... made by the Assessing Officer towards gross profit derived from real estate business by recasting trading account for relevant financial year without appreciating fact that as per provisions of section 45(2) of the Act, fair market value of the asset on date of such conversion shall be full value of consideration and thus, in place of fair market value, the Assessing Officer cannot substitute guideline value of property. 5. The learned DR, on the other hand, strongly supporting orders of the lower authorities submitted that the assessee has adopted fair market value of the land at Rs. 250/- per sq.ft., which is neither backed by any evidence nor supported by guideline value of property as on date of conversion and thus, the Assessing Of....
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....dicator for determining fair market value of the property. It is an admitted fact that there is large difference between guideline value and fair market value of property. Therefore, one cannot go by guideline value of property to determine fair market value of the property, including for the purpose of conversion of capital asset into stock in trade. Therefore, we are of the considered view that to this extent reasons given by the Assessing Officer to adopt fair market value of the property at the time of conversion of capital asset into stock in trade at Rs. 100/- cannot be sustained. Similarly, valuation of closing stock by adopting guideline value as on 31.03.2012 also cannot be accepted. However, fact remains that the assessee has also....