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TMI Blog2016 (9) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... LLANT IS A BUSINESS INCOME. 2. THE LD CIT(A) ERRED IN NOT ALLOWING THE CLAIM OF THE APPELLANT THAT THE INCOME EARNED BY THE APPELLANT ON SALE OF LAND WAS CAPITAL GAIN. 3. THE LD CIT(A) ERRED IN NOT ALLOWING SET OFF OF LONG TERM CAPITAL LOSS OF RS. I8,77,377- FOR THE ASSESSMENT YEAR 2006-07 AGAINST THE LONG TERM CAPITAL GAIN FOR THE ASSESSMENT YEAR 2007-08. 4. THE LD CIT(A) ERRED AND DISALLOWED THE CLAIM OF THE APPELLANT WITHOUT GOING TO THE FACTS OF THE CASE AND RELEVANT CASE LAWS SUBMITTED AT THE TIME OF HEARING. 5. YOUR APPELLANT RESERVES THE RIGHT TO ADD, ALTER OR DELETE THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF THE HEARING." 2. During the course of hearing, arguments were made by Shri Vijay Mehta, Authorised Representative (AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income f iled from A.Y.1996-97 to 2006-07. As per direction of the Hon'ble CIT, the partnership deed of the assessee has been duly verified and from which it is noticed that the firm was incorporated with the intention of deal ing in the business of sell ing and purchasing immovable properties and or to develop the immovable properties and to sell the flats units, commercial premises, office contracted thereon. From the same, it is clear that the assessee firm was incorporated with an intention to deal in properties. Therefore, it is clear that the investment shown by the assessee is nothing but its stock in trade. 6. This fact is further strengthened by the fact that the assessee firm had not filed the returns of income for A.Y.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,66,805/- 3.1. Being aggrieved, the assessee filed an appeal before Ld. CIT(A) and made exhaustive submissions to establish that the land was part of investment and resultant profit was income from business. But Ld. CIT(A) did not agree with the submissions of the assessee and endorsed the observations of the AO and dismissed the appeal of the assessee. 3.2. Being aggrieved, the assessee filed an appeal before the Tribunal. The Ld. Counsel of the assessee made exhaustive submission to demonstrate that impugned land was investment. 3.3. Per contra, Ld. DR was not able to bring any contrary material on record. But, he strongly relied upon the orders of the lower authorities. 3.4. We have gone through the orders of the lower author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en submitted by the assessee that the assessee firm was not having any taxable income, and therefore no returns were filed for any year prior to A.Y. 2006- 07. In these circumstances, we find that merely because no return was filed by the assessee in earlier years in absence of any taxable income, the character of land would not automatically get changed from 'investment' to 'stock-in-trade'. The other allegation of the AO is also without any basis and legal substance wherein it was stated that the assessee firm was constituted for the main object of development and trading in immovable properties, therefore, the impugned land should also be necessarily characterised as part of stock-intrade. We find no basis for such a bald allegation. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the time limit extended by the Central Board of Direct Taxes vide its notification dated 24th July 2006, but the AO omitted to grant the benefit of set off of brought forward long term capital loss under some erroneous assumption of facts with regard to time limit of filing of return and actual date of file of return. 4.1. We find that it is a matter of proper verification of facts and therefore, this issue is sent back to the file of the AO to verify the requisite facts with regard to actual date of filing of return and extended due date of filing of return and claim made by the assessee in the return of income filed in A.Y. 2006-07 with respect to carry forward of long term capital loss. The AO shall give opportunity of hearing to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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