2009 (12) TMI 48

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....'s income from the sale of the property at Greams Road and the sale consideration should be taken only at Rs.5 Crores as shown in the sale deed?, the Revenue has come up by way of an appeal under Section 260A of the Act before this Court against the order of the Tribunal dated 22.5.2009 made in ITA No.1307/Mds/2008 relating to the assessment year 2004-2005. 2. The minimum facts for the disposal of the appeal as culled out from the statement of facts contained in the memorandum of grounds are as follows: The assessee company filed its return of income for the assessment year 2004-2005 on 1.11.2004 admitting an income of Rs.78,23,894/- and claimed set off of the entire income against the earlier years' losses and claimed capital loss....

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....ly to computation of income under capital gains and not for computation of business income. It was also contended that the payment to the land owners in a sum of Rs.63,61,681/- and the brokerage paid in a sum of Rs.12.5 Lakhs should also be reduced. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to verify the claim. However, he agreed with the assessee's contention that the provisions of Section 50C of the Act would apply only for computation of capital gains and not for computation of business income and therefore directed the Assessing Officer to adopt the sale consideration of Rs.5 Crores. 4. Aggrieved by the order of the Commissioner of Income Tax (Appeals), the Revenue filed an appeal before the Income Tax A....

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....e consideration to Rs.6,94,45,920/- as against Rs.5 Crores  the apparent sale consideration shown in the sale deed. The Tribunal also, taking note of the facts stated above, has come to the conclusion that invocation of Section 50C of the Act is not warranted as the property was never held by the assessee as capital asset and as per the accounts also, the amount given to the owner of the property has been shown as loans and advances thereby the property has been treated as business asset and not as capital asset. The invocation of Section 50C of the Act as can be seen from the provisions of the Act can be made in order to find out the true value of the capital asset. In the very facts and circumstances of the case, the property in the ....