Principal Commissioner Of Income Tax 7 v. Sikandarali Kasamali Qureshi

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/TAX APPEAL NO. 394 of 2018 ================================================================PRINCIPAL COMMISSIONER OF INCOME TAX 7VersusSIKANDARALI KASAMALI QURESHI ================================================================ Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI andHONOURABLE MR.JUSTICE B.N. KARIADate : 30/04/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1.Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 12.9.2017, raising following questions for our consideration. “(A)Whether the Appellate Tribunal has erred in law and on facts in treating the receipt of Rs.1,42,00,000/- arising out of transfer of capital assets as LTCG and not business income? (B)Whether the Appellate Tribunal has erred in law and on facts in granting exemption u/s 54F of Rs.40,74,249/-, though there being no transfer of any long term capital asset by the assessee?” 2.The respondent-assessee is an individual. For the assessment year 2010-11. in the return filed, the assessee shown a long term capital gain of Rs.1.42 Crore and offered it to tax after claiming deductions under Section 54F of the Income Tax Act, 1961 (For short, “the Act”). 3.The Assessing Officer, however, held that the receipt in question was in the nature of a business profit and not long term capital gain. The assessee carried the matter in appeal. CIT (Appeal) and thereafter the Tribunal both ruled in favour of the assessee. In particular the Tribunal while confirming the decision of the CIT (Appeals) noted that assessee had entered into an agreement to purchase certain lands by executing Banakhat on 19.10.1979 and 11.10.1989. Possession of the land was also handed over to the assessee. The land owners have also executed irrevocable power of attorney in favour of the assessee in the year 1989 and 2003. The final sale deeds took place in favour of the third parties on 1.2.2010 in which the assessee acted as a Confirming Party. It was on account of such transaction that the assessee received sizeable amounts which were offered to tax as capital gain. 4.The Tribunal further noted that because of the documents executed in favour of the assessee at the time of execution of final sale deed, the assessee would relinquish his rights in such lands in favour of ultimate buyer and also hand over the possession thereof. It was because of this that the assessee was referred to as a Confirming Party. The Tribunal further noted that the assessee had executed only these two land transactions in a span of 20 years clearly indicating that the assessee was not in the business of buying and selling land. No question of law arises. Tax Appeal is dismissed. (AKIL KURESHI, J) R.S. MALEK (B.N. KARIA, J)