2025 (2) TMI 983

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....ent year 2015-16. 2. The solitary issue raised by the Revenue in appeal is with respect to income from sale of part of property No.99, Rajpur Road, Dehradun. The assessee has offered gain on sale of land under the head 'Capital Gains', whereas, the Revenue intends to tax the gain under the head 'Profits from business and Profession'. 3. The facts of the case as emanating from records are: The assessee is a partnership firm and is engaged in the business of real estate development. The assessee was having land/property no.99 Rajpur Road, Dehradun. The assessee had acquired said land in Financial Year 2008-09 and since the date of acquisition had shown land in the books as capital investments. During the period relevant to assessment ye....

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....le of shops is purely business activity. He further submitted that it is a well settled law that entries in the books of account does not determined true nature of the activities. He asserted that the CIT(A) has erred in placing too much reliance on the books of assessee to determine nature of transaction. The CIT(A) has accepted contention of the assessee without looking at facts evident from the records. 5. Per contra, Shri Rajiv Sahni appearing on behalf of the assessee submits that the assessee had acquired land in Financial Year 2008-09 and right from the beginning intention of the assessee was to hold the land as capital investment. In support of his submissions, he referred to Balance Sheet as on 31.03.2009 at page no. 34 of the p....

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....ustrial Development Company Ltd., 82 ITR 586. 6. We have heard the submissions made by rival sides and have examined the orders of authorities below. The short issue in present appeal by the Revenue is, Whether the income earned by the assessee from sale of shops which are part of property situated at 99 Rajpur Road, Dehradun is taxable under the head 'Capital Gains' or 'Business of Income'. 7. The assessee has offered gain on sale of shops as Long Term Capital Gain, whereas, the AO has re-characterized gain on sale of shops as Business Income. It is an undisputed fact that the assessee had acquired property at 99, Rajpur Road, Dehradun during Financial Year 2008-09 and since then the assessee has held the same as investment. This fac....