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TMI Blog2021 (3) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... x under the head capital gains . In the present case, it has no where been shown that the land was purchased by the assessee with the intention to sell at a profit or with requisite intention to bring it within the parameters of stock-in-trade . Therefore, after considering the factual position as enumerated hereinabove, we found that the ld. CIT(A) has rightly concluded that the gains are to be charged to tax under the head capital gains . No new facts or circumstances have been brought before us by the ld. DR in order to controvert or rebut the findings so recorded by the ld. CIT(A), therefore, we find no reason to interfere into or deviate from the findings of the ld. CIT(A). Accordingly, we uphold the same. Whether provisions of section 50C are applicable? - HELD THAT:- Cost of acquisition shall be allowed in the proportion of built up area sold/surrendered to builder as bears to total built up area acquired by assessee from developer in lieu of 35% land. CIT(A) has further held that in 3rd issue, the assessee is whether deemed sale value of land transferred and value of constructed area transferred is to be taxed or not as such constructed area was received in excha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on the basis of valuation adopted by the Stamp Duty Authorities. Therefore, we modify the order of the ld. CIT(A) to the extent that the A.O. is directed to consider the sale value under the capital gains and worked out proportionate long term capital gain in respect of land and short term capital gain in respect of construction by allowing the deduction for cost of acquisition/indexed cost of acquisition as per provisions of law. Therefore, with this modification, we uphold the other operative portion of the ld. CIT(A) and restore this issue back to the file of the A.O. for deciding the issue as per directions given - ITA No. 823/JP/2019, C.O. No. 29/JP/2019 (Arising out of ITA No. 823/JP/2019) - - - Dated:- 17-3-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Rajiv Sogani (CA) For the Revenue : Shri Ambrish Bedi (CIT-DR) ORDER PER: SANDEEP GOSAIN, J.M. The appeal filed by the revenue and the cross objection filed by the assessee arise against the order of the ld. CIT(A)-2, Jaipur dated 26/03/2019 for the A.Y. 2012-13. The grounds taken in the revenue s appeal and assessee s C.O. are as under: Grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A.O. after discussing all the facts and circumstances as well as the documents placed before him passed assessment order U/s 143(3) of the Income Tax Act, 1961 (in short, the Act) determining total income of assessee at ₹ 8,81,03,620/-. 4. Being aggrieved by the order of the A.O., the assessee carried the matter before the ld. CIT(A), who after considering the submissions of both the parties as well as material placed before him, given relief to the assesse. Against the order of the ld. CIT(A), the revenue is in appeal challenging the order of the ld. CIT(A) and the assessee is in cross objection challenging the order of the ld. CIT(A) for computing Long Term capital gain and short term capital gain, deduction of cost is to be worked out on the basis of floor-wise valuation according to stamp/revenue authorities. 5. Ground No. 1 and 2 of the revenue s appeal is interrelated and interconnected and relates to challenging the order of the ld. CIT(A) in considering the value of 35% land area transferred to developer as Long Term Capital Gain instead of business income of the assessee without appreciating the fact that the assesse has entered into development agreement f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered agreement in which person owning land or building or both, agrees to allow another person to develop a real estate project on such land or building or both in consideration of a share being land or building or both in such project, whether with or without payment of pail of the consideration in cash. 7. We have heard the ld. Counsels of both the parties and have perused the material placed on record. We have also deliberated upon the decisions cited in the orders passed by the authorities below as well as cited before us and we have also gone through the orders passed by the revenue authorities. From perusal of the record, we noticed that the ld. CIT(A) has dealt with the issue in para 2.3 of her order by holding as under: 2.3 Ground no. 01 to 04 are interconnected and being taken up together. I have perused the facts of the case, assessment order and the submission of the appellant. It is seen that appellant was owner of property at C-94, Subhash Marg, Jaipur measuring 1978.88 Sq. yd. which devolved upon him on 11.04.1994 by will of his father. Thereafter the assessee entered into a developer agreement with M/s Anukampa Builders Pvt. Ltd. and builder agreed to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, I find force in arguments of Authorized Representative that he sold the capital asset. He has not carried out any development activity on the land. He has received the property on will and never engaged in business of real estate. Assessee entered into only one transactions of property. Various cases referred by Authorized Representative also support his case. Therefore, the Assessing Officer is directed to assess the gain on transfer of 35%share in the land under the head long term capital gain. From this, the Assessing Officer allowed deduction for proportionate cost of land without allowing indexation as he had allowed the deduction under the head business income. But since I have held land to be assessed under head of Capital Gain, Assessing Officer is directed to allow the indexed cost of acquisition as claimed by assessee at ₹ 14,40,380/- as claimed by the assessee as against of ₹ 1,98,776/-,allowed by Assessing Officer. The 2nd issue is whether provisions of section 50C are applicable. Since in earlier para, I have held that the income from sale of property is to be taxed under the head long term capital gain, therefore provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd builder agreed to share 65% of the total constructed area with proportionate land. The construction of the building was completed during the year and assessee received 65% of his share. Further, the assessee sold part of this area for ₹ 24,00,000/- on which he has shown long term capital gain ₹ 15,51,425/- and short term capital gain ₹ 2,38,996/-. He claimed deduction of ₹ 14,00,000/- under section 54EC on account of investment in bonds. Thereafter, the assessee revised the return of income and offered long term capital gain of ₹ 5,23,66,528/- and short term capital gain of ₹ 13,11,857/- arising out of assessee's parting with 35% of land to the builder, as well as direct sale which is at page no. 95 to 99 of paper book. The ld. CIT(A) has held in the impugned order that the 1st issue is whether the deemed sale proceeds on 35% land area transferred to developer is to be taxed under which head. 2nd issue is whether the total area is 692.60 Sq. yd. or 639.33 Sq. yd. So far as area is concerned, we observed that the Assessing Officer, in remand report, accepted that 35% of the land is to be taken at 639.33 Sq. yd. Therefore, the same was accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use changed from agricultural to resort and to residential stock in trade of his business of selling the plots of land for earning profit. Therefore, the cited cases ae of no help to the Revenue. In the present case, it has no where been shown that the land was purchased by the assessee with the intention to sell at a profit or with requisite intention to bring it within the parameters of stock-in-trade . Therefore, after considering the factual position as enumerated hereinabove, we found that the ld. CIT(A) has rightly concluded that the gains are to be charged to tax under the head capital gains . No new facts or circumstances have been brought before us by the ld. DR in order to controvert or rebut the findings so recorded by the ld. CIT(A), therefore, we find no reason to interfere into or deviate from the findings of the ld. CIT(A). Accordingly, we uphold the same. 10. We found from perusal of the record that the ld. CIT(A) further held that the 2nd issue is whether provisions of section 50C are applicable, she held that that the income from sale of property is to be taxed under the head long term capital gain, therefore provisions of section 50C are applicable. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of 35% (as declared by the Assessee in his return of income) and not to the extent of 100%. Now raising a ground for treating the transfer to the extent of 100% is neither justified on merits nor the same can be raised by the Department at this stage. 13. Having considered the rival contentions and from perusal of the record, we found that the revenue is raising a new issue at this stage. It is undisputed fact that the AO had admitted the transfer of the land to the extent of 35%, as has been declared by the assessee in his return of income and not to the extent of 100%. Considering the totality of facts and circumstances, we hold that now raising a ground for treating the transfer to the extent of 100% is neither justified on merits nor the same can be raised by the revenue at this stage. Accordingly, we dismiss this ground of appeal raised by the revenue. 14. Now we take the assessee s cross objection wherein the assessee has challenged the order of the ld. CIT(A) in holding that for the purpose of computing Long Term capital gain and short term capital gain, deduction of cost is to be worked out on the basis of floor-wise valuation according to stamp/revenue authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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