9911796707
TMI Blog2014 (10) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly. Income from the sale of the premises in question as sale of the stock in trade - busniss income - assessee submitted that property in question was converted from stock in trade to investment in the year 2005 - Held that:- Mere changing the head in the balance sheet is not sufficient to hold that the intention of the assessee to hold the property was as investment. From the record, we observe that since the assessee could not sell its property at appropriate time and therefore had exploited it for rental purposes. To get the benefit of indexation, the assessee made the accounting entry treating the same as investment, whereas, the real business intention and treatment of the property remained the same i.e. to sell it for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in treating the rental income of ₹ 4.6 crore received by the assessee on letting out the unsold stock as Income from house property instead of Business income and further, the allowing of deduction under section 24 of the Act to the assessee. 4. At the outset, the ld. A.R. of the assessee has brought to our attention that the issue relating to income from the unsold stock of premises in Mayfair Towers has already been settled by the co-ordinate benches of the Tribunal in the own case of the assessee vide orders dated 11.12.08 in ITA No.6449/M/06 for assessment year 2000-01. The said decision has been further followed in the decision of the Tribunal dated 26.02.09 for A.Ys. 2002-03, 2003-04 2004-05 and further vide order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciating the fact that the Long Term Capital Gains oil of property is not exempt from tax and is liable to be taxed @ 20% which the appellant had already paid. 3. The appellant therefore prays that the profits arising from sale of commercial premises he treated as Long Term Capital Gain and the capital gain be computed in accordance with the provisions of section 48(i) and 48(u) of the Income Tax Ac t, 1961. 4. Each of the above grounds of appeal are independent and without prejudice to one another. 5. The appellant cra ves leave to add, alter, amend, modify, delete and vary all or any grounds of appeal as and when provided. 7. The brief facts are that the assessee firm is in the business of real estate development. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme, deal in real estate, carry out of construction of commercial, residential or industrial complexes and was engaged in all other activities as may be incidental to the above said activities. He further observed that as per the partnership business of the assessee firm, the firm had entered into an agreement of development dt.14/7/1992 with the Trustees of Ramkorebai Laxmibai Hindu Sanitorium to develop the land on which these two buildings namely Mayfair Tower I and Mayfair Tower II were constructed by the assessee. As the assessee was the developer of the land who constructed the buildings, the buildings were rightly treated by them as stock in trade. As the units in the buildings remained unsold, the assessee w.e.f. from 1/4/2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted and developed by the assessee in pursuant of its business endeavors as mentioned in the partnership firm deed. The main business of the assessee was of a builder and developer. The assessee had developed the entire building with the intention to hold the property as stock in trade. The change in the books of accounts from stock in trade to investment was made before the sale of property to avoid payment of full taxes by changing the nature of the property. The ld. CIT(A) held that the substance of the transaction was required to be seen, which showed that the property held as stock in trade was sold and as such the income was liable to be taxed as business income. Aggrieved by the order of the ld. CIT(A), assessee has come in appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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