Asstt. Commissioner of Income-Tax Circle–18(3), [Erstwhile ACIT–14(3)], Mumbai v. Gopal Ramrakh Maheshwari
[Citation -2016-LL-0922-34]
| Citation | 2016-LL-0922-34 |
|---|---|
| Appellant Name | Asstt. Commissioner of Income-Tax Circle–18(3), [Erstwhile ACIT–14(3)], Mumbai |
| Respondent Name | Gopal Ramrakh Maheshwari |
| Court | ITAT-Mumbai |
| Relevant Act | Income-tax |
| Date of Order | 22/09/2016 |
| Assessment Year | 2011-12 |
| Judgment | View Judgment |
| Keyword Tags | construction activity • residential building • agreement for sale • profit on sale • purchase price • sale of flat • tax effect |
| Bot Summary: | On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that income from sale of flat declared by the assessee was capital gains, as against business income assessed by the A.O. 2 M/s. Maheshwari Maheshwari 2. On the facts and in the circumstances of the case, the CIT(A) has failed to appreciate that: a) the assessee has taken three flats from the same builder, while he already has a Residential Property at Nanachowk. B) the flat sold by the assessee during the year is out of 3 flats booked by the assessee in the residential building project constructed by the developer MIs. C) though the assessee has held the flat sold for a period of seven years in the first look, but on careful perusal of facts it is apparent that he did not hold the flat in a condition in which it would fetch him an income and delay in the construction activity restrained him from selling and profit on sale on such right in residential house is taxable as adventure in the nature of trade. Thereafter, the assessee has sold his right in the aforesaid agreement to acquire the flat by entering into an sale agreement dtd.21.10.2010 with Mrs. Shubangi Wadekar for sale of the above flat to her for a sum of Rs.60,00,000/-. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has failed to appreciate that the assessee earned exempt income in the form of dividend and did not make any disallowance of expenses against the same. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has failed to appreciate that the assessee was holding substantial investment funds which yielded/likely to yield exempt income and he has also failed to maintain separate books of accounts for taxable income and exempt income. |