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Issues involved:
The judgment involves the following Issues: 1. Assessment of sales consideration for property exchange. 2. Determination of business income vs. capital gains. 3. Treatment of differential consideration as business loss. 4. Consideration of additional alternate ground of appeal. Issue 1: Assessment of sales consideration for property exchange: The assessee exchanged development rights of properties at Dhanori and Mohammedwadi, Pune. The Assessing Officer assessed a profit of Rs. 34,03,340 as a result of this exchange, based on the stamp duty value of the Mohammedwadi property. The assessee contended that no income accrued as no cash consideration was received. The Commissioner of Income-tax (Appeals) upheld the assessment, considering the fair market value of the Mohammedwadi property as the consideration received. The Tribunal affirmed this decision, stating that the exchange resulted in a taxable event, and the consideration received in the form of development rights constituted income. Issue 2: Determination of business income vs. capital gains: The assessee argued that the transaction should be treated as business income, not capital gains, as the Dhanori land was a business asset. The Tribunal agreed that the transaction was of a business nature, and the profit was assessable as business income. The assessee disputed the quantification of profit based on the stamp duty value. The Tribunal affirmed the Assessing Officer's decision to use the stamp duty value to compute the surplus, as no alternative basis was provided by the assessee. Issue 3: Treatment of differential consideration as business loss: The assessee contended that the differential consideration should be treated as a business loss. However, the Tribunal upheld the addition of Rs. 34,04,340 as profit on the sale of Dhanori land, affirming the Commissioner of Income-tax (Appeals) decision. Issue 4: Consideration of additional alternate ground of appeal: The assessee raised an additional alternate ground of appeal, which was not dealt with by the Commissioner of Income-tax (Appeals). The Tribunal dismissed the appeal, stating that the alternate plea regarding the subsequent assessment year was not relevant to the current dispute, but advised the Assessing Officer to consider it appropriately for the next assessment year if brought to his notice. In conclusion, the Tribunal dismissed the appeal of the assessee, upholding the assessment of profit as business income and the use of stamp duty value for computation of surplus on the property exchange.
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