MAHESHWARI MEGAVENTURES LIMITED ,HYDERABAD,HYDERABAD vs. ACIT, CIRCLE-16(2), HYD, HYDERABAD

ITA 1291/HYD/2016Status: HeardITAT Hyderabad03 May 2024AY 2009-10Bench: SHRI RAMA KANTA PANDA (Vice President), SHRI K.NARASIMHA CHARY (Judicial Member)12 pages
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What did the Tribunal hold?

The Tribunal held that Section 50C is not applicable to the sale of property after its conversion into stock-in-trade, as it applies only to capital assets. The reopening of assessment was also found to be invalid as it was based on an audit party's interpretation of law, not new information.

What were the facts?

The assessee converted a capital asset into stock-in-trade and later sold it. The Assessing Officer sought to reopen the assessment to apply Section 50C, treating the sale as that of a capital asset, despite the assessee's contention that it was stock-in-trade.

What were the issues?

Whether Section 50C of the Income Tax Act applies to the sale of stock-in-trade, and whether reopening of assessment based on an internal audit report is valid.

Which sections of the Income-tax Act were involved?

Section 147,Section 50C,Section 143(3)

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD

Before: SHRI RAMA KANTA PANDA & SHRI K.NARASIMHA CHARY

For Appellant: Shri K.C. Devdas, AR
For Respondent: Shri Kumar Pranav, CIT-DR
Hearing: 02/04/2024

PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 04/08/2016 passed by the learned Commissioner of Income Tax (Appeals)-4, Hyderabad, in the case of Maheshwari Megaventures Ltd., (“the assessee”) for the assessment year 2009-10, assessee preferred this appeal.

2.

Brief facts of the case are that the assessee is engaged in the business of real estate. For the assessment year 2009-10, it filed its return of income on 30/09/2009 declaring an income of Rs. 2,38,14,880/-. By order dated 30/12/2011 passed under section 143(3)

The order continues below.

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