2025 (11) TMI 327

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....ggrieved by the action of the Revenue in treating the sale of a property as business income instead of capital gains. 3. The assessee is an individual. He purchased a vacant site at Mysore Road, Bengaluru, on 03.09.2007 for Rs.2.80 crore through a registered sale deed. In 2008, the assessee obtained sanction from BBMP and constructed a commercial building (Lodge and Restaurant complex). The construction was financed by own funds and borrowed funds. 4. The assessee intended to let out the building for commercial use. Negotiations were held with Apodis Hotel & Resorts Ltd. in 2009. They even submitted a revised plan to suit their requirements. The deal could not go through. The assessee also issued advertisements in newspapers on 15.05.....

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....ent. It was also declared in wealth-tax returns as evident from page 185 of the paper book. 10. The assessee's intention was never to sell the property for profit. His intention was to earn rental income. This is proved by the negotiations with Apodis Hotel, by the revised plan submitted by them, and by the advertisement for tenancy published in 2010. 11. The assessee waited nearly six years before selling. He sold only because he could not secure tenants and faced financial strain. A forced sale under compulsion cannot be equated with business motive. The AR relied on several case laws reproduced on 6 of the ld. CIT-A order. On the strength of these rulings, it was argued that the income should be taxed under "Capital Gains" and not ....