2017 (9) TMI 971 - HC - Income Tax

Income from sale of land - business income or capital gain - nature of land - cost of the land determined proportionately - Held that - We do not see how the Tribunal can be faulted. The Tribunal has recorded that the assessee was holding 50.16 acres of land, out of which 27.44 acres of land is the subject matter of the MOU dated 27the December, 2007. The remaining land aggregating to 22.72 acres has been converted by the assessee as capital asset, that is subsequent to the impugned transaction. It is in these circumstances and when the total cost of the land has been determined proportionately that all the questions, and particularly whether the impugned transaction relates to transfer of stock-in-trade or capital asset, have been answered in favour of the assessee and against the Revenue. To our mind, when the written documents were perused and with the corroborating materials, the Tribunal rightly concluded that the impugned transaction relates to the business of the assessee and is to be assessed as such under the head profit and gains of business and profession . The Tribunal being empowered by law to undertake that exercise, has performed it s duty. We do not see how in such background can the Tribunal s view be termed as perverse or it s order termed as vitiated by any error of law apparent on the face of record. No substantial questions of law. - Decided against revenue.

Summary

Issues:
Challenge to Tribunal order for assessment year 2009-2010 regarding capital gains treatment of a property transaction.

Detailed Analysis:

1. Assessment of Capital Gains:
- The Revenue's Appeal contested the Tribunal's order for the assessment year 2009-2010.
- The Assessing Officer treated the unrecorded sum of ?15,94,06,500 as short-term capital gain.
- The Commissioner of Income Tax upheld this treatment, leading to the Tribunal's review.

2. Interpretation of Facts by Tribunal:
- The Tribunal's decision was challenged for misinterpretation of facts.
- The Tribunal directed to assess the income under "profit and gains of business or profession" based on a revised consideration of ?5,24,27,354.
- The applicability of Section 50C was disputed, leading to the argument of perversity and contrary to law.

3. Examination of Tribunal Order:
- The High Court carefully examined the Tribunal's order and Section 50C of the Income Tax Act, 1961.
- The Tribunal's conclusion was based on factual findings regarding the nature of the transaction and the business activities of the assessee.

4. Assessee's Business Activities:
- The assessee was engaged in building and development activities.
- The Tribunal considered the details of the transaction, including the MOU with another party for transfer of development rights.
- The Tribunal found no fault in the assessee's treatment of the transaction as business income.

5. Conclusion and Dismissal of Appeal:
- After thorough consideration of all facts and documents, the High Court upheld the Tribunal's decision.
- The High Court found no substantial questions of law in the Revenue's Appeal.
- The Tribunal's decision was deemed appropriate, and the Appeal was dismissed without costs.

Overall, the judgment focused on the correct interpretation of facts, application of relevant legal provisions, and the nature of the transaction in determining the appropriate treatment of income for the assessment year 2009-2010.