2020 (3) TMI 1405 - AT - Income Tax

Income from selling the plot - business income OR capital gain - Applicability of section 50C in respect of the lease hold right in land - HELD THAT - Request for setting aside the issue of applicability of section 50C of the I.T. Act in respect of lease hold rights in land requires thorough consideration at the level of the Assessing Officer. Therefore, in the interest of justice, we set aside the issue involved in the additional ground i.e. Whether the AO as well as Ld. CIT(A) erred in law and on facts in not appreciating that the provisions of section 50C of the Act are not applicable in respect of lease hold right in land , this issue may be considered and decided by the Assessing Officer afresh, after giving adequate opportunity of being heard to the assessee, by adopting the prescribed procedure under the law. Appeal of the Assessee is allowed for statistical purposes.

Summary

Issues:
1. Discrepancy in income classification - business income vs. capital gain
2. Dismissal of ground due to lack of evidence for not serving statutory notice
3. Dismissal of general and subjective ground by Ld. CIT
4. Acceptance of stamp valuation authority amount for assessment
5. Disallowance and confirmation of interest without basis

Analysis:
1. The appeal pertains to the discrepancy in classifying income from selling a plot as business income by the Assessee, whereas the ITO assessed it under the head of capital gain. The Assessee challenged this classification, leading to a legal dispute.

2. The Assessee raised a ground challenging the dismissal by the Ld. CIT based on the absence of evidence regarding not serving the statutory notice. This issue highlights the importance of procedural requirements in tax matters.

3. Another ground raised by the Assessee was dismissed by the Ld. CIT on the basis of being general and subjective, requiring no adjudication. This emphasizes the need for specific and substantiated grounds in tax appeals.

4. The Ld. CIT's observation regarding the acceptance of the stamp valuation authority amount solely for stamp duty purposes and not as the base of assessment was contested. This issue underscores the significance of valuation methods in tax assessments.

5. The disallowance and confirmation of interest by the Ld. CIT without a proper basis were challenged by the Assessee. This issue highlights the necessity of providing a valid rationale for any disallowances in tax assessments.

The Assessee, during the hearing, chose not to press certain grounds and focused on the applicability of section 50C of the Income Tax Act concerning leasehold rights in land. The Assessee requested a thorough consideration of this issue by the Assessing Officer. Consequently, the Tribunal set aside the issue for the Assessing Officer's fresh consideration, emphasizing the importance of due process and opportunity for the Assessee to be heard. Ultimately, the Appeal of the Assessee was allowed for statistical purposes, indicating a partial success in challenging the initial assessment.