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TMI Blog2010 (4) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... of 28,510 square feet of land received by the assessee for developing 2 acres 29 guntas of agricultural land belonging to Sri Anjanappa into a residential layout should be treated as the capital asset of the assessee and indexation allowed by bringing the said income to tax under the head capital gains. (ii) Whether the appellate authorities having held that the assessee had acquired 28,510 square feet of land in the course of business were correct in holding that the sale proceeds derived from the sale of this property cannot be brought to tax under the head business income as it was not treated as stock in trade by the assessee which was on account of his default. (iii) Whether the appellate authorities were correct in hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 30,000 sq. ft. of land which was given to him by Sri Anjanappa in terms of the contract. 3. The Assessing Officer rejected the case of the assessee and treated the sale consideration received by the assessee as an income from business. Accordingly an order of assessment came to be passed. Against it, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), which came to be allowed by holding that the sale consideration received by the assessee by selling 30,000 sq. ft. of land should be treated as income from capital gain and not as business income. Being aggrieved by the order of Commissioner of Income-tax (Appeals), the Revenue filed an appeal before the Tribunal. The Tribunal also confirmed the order passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the assessee could not have been considered as the owner in order to consider the case of the assessee holding that the income received is a capital gain and not a busi-ness income. 7. Per contra, Sri Parthasarathi, learned counsel for the respondent asses-see contends that under the Income-tax Act, if the sale consideration is passed on and if the possession is transferred, it amounts to sale and the registration of sale deed is not required in order to treat the transaction as complete sale. According to him, the assessee had spent more than Rs.7,00,000 for developing the lay out. In addition to that, he has rendered services to secure the customers to Sri Anjanappa to sell his portion of the land excluding 30,000 sq. ft. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land received by him from Sri Anjanappa as a capital in nature. According to us, considering the agreement placed before us, which was entered into between Sri Anjanappa and the assessee the asses-see has spent amounts for the formation of lay out and Sri Anjanappa in turn has delivered 30,000 sq. ft. of land in terms of the contract. When the assessee is not indulging in such activities, which is not his regular busi-ness, if 30,000 sq. ft. of land is acquired, by spending Rs. 7,00,000, the said amount has to be treated as sale consideration. Accordingly, we hold that the assessee had become the absolute owner by paying Rs. 7,00,000 as consideration. When the sale consideration is fully paid by the assessee to Sri Anjanappa and he has del ..... X X X X Extracts X X X X X X X X Extracts X X X X
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