TaxTMI 
TaxTMI 
2026 (4) TMI 1473
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....f capital gain done by AO and confirmed by CIT(A) is incorrect, since while calculating the capital gain on sale of land to M/s Vedbhumi Builders, the cost of acquisition of different land is deducted from the sale price. 3. The appellant craves leave to add, alter, amend, or withdraw any of the above grounds of appeal before or at the time of hearing. 3. Brief facts of the case are that assessee is an individual, engaged in the business of land development and plot trading, filed his return of income for AY 2013-14 declaring total income of Rs. 76,13,940/- furnished on 29.08.2019. On the basis of the information received by the Ld. Assessing Officer (AO) that assessee along with Shri Karemore executed sale deed on 31.12.2012 for a market value of Rs. 9,21,00,000/-. Shri Karemore was given irrecoverable Power of Attorney (POA) to the assessee. The assessee executed an oral agreement with sale with the owner of the land on 21.02.2006. Moreover, sale deed was executed on 10.07.2009 and the indexed cost of the said property was valued at Rs. 96,30,310/-, in which assessee's share comes to Rs. 48,15,155/-. Thus, long term capital gain is estimated to Rs. 4,12,37,845/- after....
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....ransaction necessarily partakes the character of transfer of a capital asset, thereby attracting the provisions of section 50C of the Act, irrespective of the accounting treatment adopted by the assessee or the claim that the land constituted stock-in-trade. The Ld. CIT(A) further held that the assessee had disclosed nil opening stock, and had failed to furnish any credible documentary evidence to substantiate that the land was held as stock-in-trade. Therefore, Ld. CIT(A) confirmed the addition made by the Ld. AO on account of Long Term Capital Gain. 5. Aggrieved by the order of Ld. CIT(A), assessee is in appeal before this Tribunal. Ld. Counsel for the assessee, placing reliance on the paper book running into 79 pages submitted that assessee never acquired ownership of the Chikhali Deosthan land through any Sale Deed. He acted merely as a developer under a registered irrevocable Power of Attorney (POA) dated 20.11.2008, which granted rights for development, layout approval, and sale on behalf of the original owners (Nakade family), without transferring title. The 7/12 extracts confirm that ownership remained with the Nakade family. Accordingly, the land was treated as stock-in....
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....dopted by the assessee. 7. We have heard both the parties and perused the material available on record. We find that AO has primarily proceeded that assessee was a co-owner of the land by relying upon the registered sale deed dated 10.07.2009 and the fact remains that assessee executed the subsequent sale deed dated 31.12.2012. The Ld. AO has also observed that assessee was shown as owner in revenue records and had rights to transfer the property, thereby treating the land as capital asset, and invoked section 50C. Ld. CIT(A) has confirmed the addition by holding that assessee failed to demonstrate that the land was held as stock-in-trade. In the Paper Book filed before us, we find that the Gumastha under Shops & Establishments Act clearly established that assessee was engaged in the business of Property Dealer, land Developer from 1996 onwards. On perusal of the Agreement of Sale/Development dated 20.11.2008, registered Power of Attorney (POA) and 7/12 extracts demonstrate that assessee had not acquired ownership of the total land of 10.86 acres in Chikhali Layout in question, but was merely acting as a developer/attorney holder on behalf of the original landowners, namely the ....
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....ss. The provisions of section 50C are attracted where there is a transfer of a capital asset, being land or building or both, and the consideration declared is less than the stamp duty valuation as per government ready reckoner. However, for invoking section 50C, the asset transferred must first fall within the definition of "capital asset" under section 2(14) of the Act, which specifically excludes stock-in-trade. In the present case, the AO has failed to bring any cogent material on record to establish that the land sold constituted a capital asset owned by the assessee in order to invoke sec 50C of the Act. On the contrary, the legal documents placed on record, the consistent accounting treatment in the books of account and the Department's acceptance of similar transactions in the earlier year supports the assessee's claim that the land formed part of business inventory held in the course of land development activity. 8. We further note that the present issue is no more res integra. The Hon'ble Madras High Court in the case of CIT v. Thiruvengadam Investments (P) Ltd. [2010] 320 ITR 345 (Mad) has categorically held that "where the property is treated as a business asset, the....