MALHOTRA BUILDCOM P.LTD.,ALWAR vs. ITO, ALWAR

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ITA 274/JPR/2016Status: DisposedITAT Jaipur07 March 2017AY 2011-123 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 50C of the Income Tax Act is not applicable when the asset sold is part of the stock-in-trade and income is offered under the head 'business'. Such provisions apply only to capital assets.

What were the facts?

The assessee, a builder, sold a residential unit declaring a sale consideration. The Stamp Valuation Authority adopted a higher value, leading to a difference. The assessee offered business income on this transaction.

What were the issues?

Whether Section 50C of the Income Tax Act, 1961, is applicable to a transaction where a builder sells a unit from its stock-in-trade and offers business income.

Which sections of the Income-tax Act were involved?

Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC

Before: SHRI BHAGCHANDvk;dj vihy la-@ITA No. 274/JP/2016

For Appellant: Shri Shailendra Vijay (Adv) jktLo dh vksj ls@
Hearing: 06/03/2017Pronounced: 07/03/2017

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 274/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2011-12 cuke M/s Malhotra Buildcon (P) Ltd., Income Tax Officer, Vs. B-118, Ranjeet Nagar, 60 Feet Ward-1(2), Road, Alwar. Alwar. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAFCM 5717 J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shailendra Vijay (Adv) jktLo dh vksj ls@ Revenue by : Shri R.A. Verma (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 06/03/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 07/03/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M. This is an appeal filed by the assessee against the order dated 18/01/2016 passed by the ld. CIT(A), Alwar for the A.Y. 2011-12. 2. In this case, this Bench vide order dated 26/07/2016 had dismissed the appeal of the assessee due to non-prosecution. Against the said order, the assessee filed M.A. and vide order dated 20/01/2017, the appeal of the assessee was recalled and fixed for hearing.

ITA 274/JP/2016_ 2 M/s Malhotra Buildcon Pvt. Ltd. Vs ITO

3.

The only issue involved in the present appeal is invoking the

provisions of Section 50C of the income Tax Act, 1961 (in short the Act)

in respect of the dwelling unit.

4.

The assessee is engaged in the business of the purchasing and

selling of residential plots, flats, houses etc.. During the year, the

assessee has sold a residential unit declaring sale consideration of Rs.

15,75,000/-. However, the Stamp Valuation Authority has adopted the

value of the property at Rs. 16,12,748/- and the difference of Rs.

37748/- was made.

5.

During the course of hearing, the ld. AR of the assessee has

submitted that the assessee was a builder and the unit, which has been

sold, was a part of stock in trade and the assessee has offered business

income on this transaction, therefore, provisions of Section 50C of the

Act cannot be applied in the assessee’s case as these provisions are

applicable only where the asset was held as a capital asset and the

same was transferred and the capital gain provisions were attracted.

6.

At the outset, the ld Sr. DR has relied on the orders of the lower

authorities.

7.

I have heard the rival contentions of both the parties, perused

the material available on the record and also gone through the orders

ITA 274/JP/2016_ 3 M/s Malhotra Buildcon Pvt. Ltd. Vs ITO of the authorities below. Since the assessee was engaged in the

business of construction and development of property and selling the

units. The unit, which has been sold by the assessee, was a trading

asset in the assessee’s hand and it has offered the income under the

head of business, therefore, provisions of Section 50C of the Act are

not applicable in the assessee’s case. Hence, I set aside the order of

the authorities below and allow the assessee’s appeal.

8.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 07/03/2017.

Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 07th March, 2017 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- M/s Malhotra Buildcon (P) Ltd., Alwar. 1. izR;FkhZ@ The Respondent- The ITO, Ward-1(2), Alwar. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 274/JP/2016) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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