While upholding the orders of the income tax authorities, the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench upheld addition in respect of Short Term Capital Gains on account of development agreement.
The assessee, Meena Lahoti challenged the orders of both the lower authorities’ inter alia adding short term capital gain of Rs.51,72,920/- in the course of assessment.. The assessee’s former substantive challenges correctness of the impugned short term capital gain addition and latter substantive ground was in respect of additional in nature admitted since ancillary to the main issues thereby rejecting the Revenue’s technical arguments. The assessee pleaded that the same ought to have been treated as profit and gain from business since she had transferred the land in issue in the nature of adventure in real estate development only.
The assessee contended that both the learned lower authorities have erred in law and on facts in adding impugned short term capital gains of Rs.51,72,920/- thereby ignoring the clinching fact that she had in fact indulged in development of her land in issue in the nature of adventure in real estate.
The coram of Laxmi Prasad Sahu and S.S.Godara highlight the fact that the parcel of land has remained the same in AYs.2005-06 to 2008-09 wherein the assessee has herself accepted the learned lower authorities’ action treating the developed area as the capital asset only giving rise to long term capital gains.
The tribunal while dismissing the appeal declined the assessee’s argument that the plot of land purchased followed by the development agreement within a very short span of time could give rise to huge profits in the nature of business income only.
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