2025 (7) TMI 127

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....iled return of income for AY 2015-16 declaring total income of Rs. 1,31,12,560/-. The case of the assessee was selected for scrutiny, notice u/s 143(2) was issued, subsequently due to change in incumbency notice u/s 142(1) read with Section 129 of the Act was issued and subsequent statement was also recorded u/s 131 of the Act. During the year under consideration, the AO observed from the audit report that the business of the assessee is a real estate dealing with purchase and sale of land as per Memorandum of Article. The assessee was requested to explain as to why the sale of the property should not be treated as business of the assessee. The assessee filed reply. The AO after considering the submission made by the assessee observed that ....

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....that total number of plot sold for the company during FY 2014-15 was six only and this fact has been revealed in the account and ITR as well. The Ld. A.R further submits that for all the four years whether before or after the change in the management of the company, land has been sold as capital asset of the company and has clustered new account head- fixed asset. For none of the years, the land has been sold as current asset or stock-in-trade. Hence, the question of business income / profit against the sale of such land does not arise. Moreover, during the course of scrutiny assessment for AY 2014-15 DCIT, Kolkata on this issue explained the views reflected in the accounts of the company and considered the surplus on sale of land as capita....

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.... income for AY 2014-15 submitted by the assessee along with ITR, audited books of account. It is important to mention here that this was accepted by the department as no addition was made by treating the said sale of a fragment of the same land in question under the head business income and disallowing the claim of offering the gains from the said sales under the head capital gains in the immediately preceding AY 2014-15. This fact has been established from the assessment order for AY 2014-15 where no such addition under the head business income was made in a section 143(3) of the Act. It is further important to mention herein that on perusal of the audited books of account for FY 2014-15 and FY 2013-14 (extract of audited profit and loss a....