Ran Mal Bhansali v. Asstt. CIT

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The Tax Publishers2012 TaxPub(DT) 0813 (Jod-Trib) : (2012) 044 (II) ITCL 0297 : (2012) 143 TTJ 0065 INCOME TAX ACT, 1961 --Capital gains--Applicability of section 50CTransfer of property by agreement not registered with stamp duty authorities--Assessee sold a plot through an agreement which resulted in long-term capital gain of Rs. 3,67,338. AO, after applying provision of section 50C adopted the sale value at Rs. 5,60,250 by applying DLC rate of residential plot and thereby recomputed long-term capital gain at Rs. 5,13,171. Assessee contended that where the sale took place through agreement only, provisions of section 50C could not be applied and therefore, value of capital gain showed by him was correct. Held: Since no registration was done and the plot was sold only on agreement basis, therefore, provisions of section 50C were not applicable. Accordingly, this issue was decided in favour of assessee and AO was directed to compute the capital gain on the basis of value as per sale agreement. Income Tax Act, 1961 Section 50C INCOME TAX ACT, 1961 --Head of income--Business income or capital gainPurchase and sale of shares--During the relevant year, assessee declared short-term and long-term capital gains or losses arising from purchase and sale of shares under the head 'capital gains'. AO treated the gain and loss on purchase and sale of shares as business income on the ground that assessee was trading in shares transactions very frequently, he had debited brokerage in books, he was also involved in speculation of shares and was maintaining separate books of account for dealing in shares. Held : If the assessee was purchasing shares and credited in the investment portfolio then it had to be treated on account of investment of long-term capital/short-term capital as the case may be, and if the share transactions were shown in trading portfolio, then of course the transaction had to be treated as in the nature of business and adventure. In some cases it had also been held that if the transactions of purchase and sale of shares are made on the same day or within 30 days, then of course, these transactions had to be treated as business transaction. Since all these facts had not been examined, therefore, matter was remitted to the file of AO to examine this aspect. Income Tax Act, 1961 Section 14 IN THE ITAT JODHPUR BENCH, JODHPUR SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 0813 (Jod-Trib) : (2012) 044 (II) ITCL 0297 : (2012) 143 TTJ 0065

INCOME TAX ACT, 1961

--Capital gains--Applicability of section 50CTransfer of property by agreement not registered with stamp duty authorities--Assessee sold a plot through an agreement which resulted in long-term capital gain of Rs. 3,67,338. AO, after applying provision of section 50C adopted the sale value at Rs. 5,60,250 by applying DLC rate of residential plot and thereby recomputed long-term capital gain at Rs. 5,13,171. Assessee contended that where the sale took place through agreement only, provisions of section 50C could not be applied and therefore, value of capital gain showed by him was correct. Held: Since no registration was done and the plot was sold only on agreement basis, therefore, provisions of section 50C were not applicable. Accordingly, this issue was decided in favour of assessee and AO was directed to compute the capital gain on the basis of value as per sale agreement.

Income Tax Act, 1961 Section 50C

INCOME TAX ACT, 1961

--Head of income--Business income or capital gainPurchase and sale of shares--During the relevant year, assessee declared short-term and long-term capital gains or losses arising from purchase and sale of shares under the head 'capital gains'. AO treated the gain and loss on purchase and sale of shares as business income on the ground that assessee was trading in shares transactions very frequently, he had debited brokerage in books, he was also involved in speculation of shares and was maintaining separate books of account for dealing in shares. Held : If the assessee was purchasing shares and credited in the investment portfolio then it had to be treated on account of investment of long-term capital/short-term capital as the case may be, and if the share transactions were shown in trading portfolio, then of course the transaction had to be treated as in the nature of business and adventure. In some cases it had also been held that if the transactions of purchase and sale of shares are made on the same day or within 30 days, then of course, these transactions had to be treated as business transaction. Since all these facts had not been examined, therefore, matter was remitted to the file of AO to examine this aspect.

Income Tax Act, 1961 Section 14

IN THE ITAT JODHPUR BENCH, JODHPUR