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Facts
The case concerns the classification of income from the sale of plots by Kajal Co-op. Housing Society Limited. The Assessing Officer and CIT(A) treated the income as 'Capital Gains' and applied Section 50C, making an addition, which the assessee disputed, arguing it should be 'Business Income'.
Held
The Tribunal set aside the CIT(A)'s order and remitted the matter to the Assessing Officer for a de novo assessment. It observed that the revenue authorities failed to adequately establish whether the properties were 'stock in trade' or 'capital assets'.
Key Issues
Whether income from the sale of plots should be classified as 'Capital Gains' or 'Business Income', and the correct application of Section 50C.
Sections Cited
50C
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
The captioned appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, vide order dated 16.06.2025 relevant to the Assessment Year 2013-14. 2. The assessee has raised the following grounds of appeal:
That on facts and in law, the learned NFAC has grievously erred in confirming the action of AO in taxing the sale of plots as 'Capital Gains' instead of treating it as 'Business income of the appellant. Asst. Year : 2013-14 - 2– 2. That on facts and in law, the learned NFAC has grievously erred in confirming the action of AO to apply the provisions of section 50C of the and the addition in confirming Act, Rs.1, 10,76,786/- made towards sale of plots. 3. That on facts, and in law, the learned NFAC has grievously erred in not granting the deduction of expenses incurred by the appellant, and in taxing the gross receipts. 4. In the alternate, on facts, and in law, the learned NFAC has erred in not considering the relief accepted by AO in the Remand Report. 5. That on facts, and in law, the learned NFAC has interest income Rs.81,900/-grievously erred in confirming the addition of without considering the relief accepted by AO in the Remand Report. 6. The appellant craves leave to add, alter, amend any ground of appeal.
3. On perusal of the record, we find that a notice of hearing was issued to the assessee to furnish necessary details, clarifications, and explanations to substantiate its claim. However, after examining the assessee’s submissions/rejoinder and the remand report of the Assessing Officer, the Ld. CIT(A) concurred with the findings of the Assessing Officer regarding the addition made on account of the sale of immovable properties. The Revenue authorities failed to bring on record the issue of “stock in trade” and capital asset cogently. In the interest of justice, we therefore set aside the order of the Ld. CIT(A) and restore the matter to the file of the Assessing Officer for de novo assessment. The assessee is directed to submit all relevant bank statements, documents, and explanations before the Assessing Officer and to comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments. Asst. Year : 2013-14 - 3– 4. In the result, the appeal of the assessee is allowed for statistical purposes.