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| The Tax Publishers2019 TaxPub(DT) 7352 (Ranchi-Trib) INCOME TAX ACT, 1961
Section 14
Development and construction of flats on the land purchased before 26 years only with an intention to enhance value of capital asset before selling the same, could not be treated as adventure in the nature of trade and thus, income derived on selling of flats could not be treated as business income and AO was directed to treat the income as capital gains as declare by assessee.
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Head of income - Business income or capital gain - Income derived from sale of flats constructed on land purchased years before to enhance value of capital asset before selling - AO alleging single instance to be an adventure in the nature of trade
Assessee purchased a piece land with building on 10-11-1981. Thereafter, assessee alongwith one 'P' decided to develop and construct flat after demolishing old structure on the land and constructed 12 flats and sold 6 flats. AO treated the transaction in question as an adventure in nature of trade and held that profits arising therefrom were chargeable to tax under the head 'profits and gains of business or profession.Held: Development and construction of flats on the land purchased before 26 years only with an intention to enhance value of capital asset before selling the same, could not be treated as adventure in the nature of trade and thus, income derived on selling of flats could not be treated as business income and AO was directed to treat the income as capital gains as declare by assessee.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 54F
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