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TMI Blog2017 (7) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... e factual and concurrent determination of the AO, the CIT(A) and the ITAT that the plot in question was the investment of the Assessee and not its ‘stock in trade’. - ITA 251/2016 - - - Dated:- 4-7-2017 - S. Muralidhar And Prathiba M. Singh, JJ. For the Appellant : Mr. Akhilesh Kumar, Arun Kumar Agarwal Mr. Akarsh Garg, Advocates For the Respondents : Mr. Ashok Manchanda Mr. Raghvendra Singh, Advocates JUDGMENT Dr. S. Muralidhar, J. 1. This is an appeal by the Assessee under Section 260A of the Income Tax Act, 1961 ( Act ) against the order dated 6th May, 2015 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No. 2770/Del/2013 for the Assessment Year ( AY ) 2009-10. 2. The Appellant/Assessee was inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aziabad as its stock-in-trade in the subsequent year as well. Sometime in December, 2008 and January 2009, the Assessee learnt that some unauthorised persons had illegally taken possession of the said plot. The Assessee states that it lodged a complaint dated 7th January, 2009 at the Indirapuram Police Station in Ghaziabad seeking help to regain peaceful possession of the property. It is claimed that since the said property was in adverse possession, the Assessee was compelled to sell it in March 2009 for a value much below the market value. 5. For AY 2009-10, the Assessee filed its return declaring income as Nil . The return was picked up for scrutiny. By the assessment order dated 30th December, 2011, the Assessing Officer ( AO ) made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the plot was held as an investment for more than three years, there could only be a long term capital gain by indexing the cost in terms of Section 48 of the Act. 8. The ITAT held that the resolution passed by the Assessee s Board of Directors did not enable the Assessee to sell the property even in terms of Clauses 45 and 46 of the MOA. Only two properties were held by the Assessee. One had been sold in the AY in question. The ITAT noted that the main object for which the company was incorporated was to carry on the business of manufacturing, processing, importing, exporting and dealing in all kinds of ferrous and non-ferrous material meant for any industrial and non-industrial use and to carry on the business of casting, fabricat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the so-called distress sale of the property. 11. Having carefully perused the concurrent factual findings of the AO, the CIT(A) and the ITAT based on the materials placed before them, the Court is in agreement with the conclusion reached that the Assessee failed to place relevant and satisfactory materials before the authorities in support of its claim that the property should have been treated as its stock in trade and not as an investment. The mere passing of a resolution by the Board of Directors regarding commencing of a new line of business or the mere inclusion of the property in question in its stock in trade in its accounts will not relieve the Assessee from satisfying the Income Tax Authorities of the genuineness of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. (supra), on facts it was noticed that the Revenue had accepted the treatment of shares as inventories in the previous years. 15. In the present case, there were only two properties shown as stock in trade by the Assessee. The mere fact that the sale of the property in the earlier AY and the resultant reduction of the stock in trade was not questioned by the AO will not relieve the Assessee from having to demonstrate that the sale of the plot in question in the AY under consideration was not by way of an investment resulting in short term capital gains. 16. The Court is unable to find anything perverse in the factual and concurrent determination of the AO, the CIT(A) and the ITAT that the plot in question was the investm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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