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| The Tax Publishers2019 TaxPub(DT) 1368 (Del-Trib) INCOME TAX ACT, 1961
Section 14
Assessee's main object might be to carry on the business of real estate development but that could not debar assessee from holding an asset as capital asset. As assessee had been showing land in dispute as a part of fixed assets which stood accepted year after year as an investment/fixed assets, then profit arising on sale of such capital asset would only give rise to capital gain chargeable under section 45(2), and not business income.
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Head of income - Business income or Capital gains - Profit on sale of land by developer -
Assessee engaged in real estate development declared profit on certain plot of land as capital gain. AO taxed the same as business income on the ground that assessee had intention to develop the said land for business activity.Held: Assessee's main object might be to carry on the business of real estate development but that could not debar assessee from holding an asset as capital asset. As assessee had been showing land in dispute as a part of fixed assets which stood accepted year after year as an investment/fixed assets, then profit arising on sale of such capital asset would only give rise to capital gain chargeable under section 45(2), and not business income.
REFERRED : CIT v. Gopal Purohit (2011) 336 ITR 287 (Bom) : 2010 TaxPub(DT) 1272 (Bom-HC) and CIT v. PNB Finance and Industries Ltd. (2010) 46 DTR 345 (Del) : 2010 TaxPub(DT) 2310 (Del-HC).
FAVOUR : In assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 194H
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