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TMI Blog2016 (8) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... e income is to be computed under the head ‘Income from capital gains’ under Chapter IV of the Act. In case the income is being assessed as ‘Income from business’, then there is no merit in applying the provisions of section 50C of the Act. See CIT Vs. Thiruvengadam Investments P. Ltd [2009 (12) TMI 48 - MADRAS HIGH COURT ] The finding of CIT(A) is reversed to the extent of computation of income from business. However, the finding of CIT(A) in assessing the income from gain on sale of agricultural land to be assessed as ‘Income from business’ is upheld. The Assessing Officer is thus, directed to recompute the income in the hands of assessee after affording reasonable opportunity of hearing to the assessee.- Decided partly in favour of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss/profession income. The order of AO and CIT(A) are therefore bad in law and may be vacate and may directed to accept the returned income or such other relief as considered just may be given. 2. The AO and CIT(A) orders may be vacated and suitable directions issued to compute income in accordance with law. 4. The assessee is in appeal against the order of CIT(A) in assessing the gain arising on sale of agricultural land as income from business and also in applying the provisions of section 50C of the Act. 5. The learned Authorized Representative for the assessee pointed out that though several grounds of appeal have been raised with regard to computation of capital gains in the hands of assessee, however, the limited issue which n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gains is to be worked out by adopting the value of consideration taken for the purpose of stamp duty i.e. at ₹ 1.21 crores as stipulated in section 50C of the Act. The contention of assessee before the Assessing Officer was that the agricultural land sold by the assessee was not a capital asset and also provisions of section 50C of the Act were not applicable. The Assessing Officer rejected both the contentions of assessee and re-computed the income from capital gains by taking the sale price at ₹ 1.21 crores and after allowing the indexed cost of acquisition, computed the net capital gain at ₹ 1.07 crores. The share of the assessee was worked out at ₹ 35,72,782/- which was assessed in the hands of assessee. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act be applied in order to determine the said income. On perusal of record and the limited issue raised in the present appeal, it is clear that the assessee had sold agricultural land and the gain arising therefrom was claimed to be exempt from capital gains holding that the said asset sold by the assessee was outside the purview of definition of capital asset. The said plea of the assessee has not been accepted by either of the authorities below. The Assessing Officer had computed the income from capital gains in the hands of assessee by applying the provisions of section 50C of the Act as against the sale consideration of ₹ 15,71,000/-, which was fixed between the parties as per sale deed dated 18.08.2010, the stamp duty valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Chapter IV of the Act. In case the income is being assessed as Income from business , then there is no merit in applying the provisions of section 50C of the Act. In this regard, I find support from the ratio laid down by the Hon ble Madras High Court in CIT Vs. Thiruvengadam Investments P. Ltd . (2010) 320 ITR 345 (Mad), wherein it was held as under:- Held, dismissing the appeal, that since the property in the hands of the assessee was treated as a business asset and not as a capital asset, there was no question of invoking the provisions of section 50C which pertains to determining the full value of the capital asset. The Tribunal had come to the correct conclusion. 10. In view thereof, the finding of CIT(A) is reversed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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