On appeal by the Revenue the High Court affirmed the order of the Tribunal where the Tribunal held that the transfer of development of rights the provisions of section 50C is not applicable. On appeal the Court held that to examine whether a particular transaction is a sale of a capital asset or a business transaction, multiple factors such as the frequency of trade and volume of trade, the nature of the transactions over the years, etc., are required to be examined. Court observed that The Tribunal had not questioned the factum of refund of the differential amount to the purchaser on account of the rectification deed dated May 30, 2008. The moment the receipt of the amount was recorded in the books of account of the assessee, it was to be treated as income unless it was shown to have been refunded or returned. The judgment of the High Court and order of the Tribunal were liable to be quashed and the matter remanded to the Tribunal to consider the appeal afresh in accordance with law and on the merits, taking into consideration the observations made in the judgment and take an appropriate decision on whether the transaction in question was a sale of capital assets or of stock-in-trade. (AY. 2009-10)
CIT v. Glowshine Builders and Developers Pvt. Ltd. (2023) 454 ITR 249/ 293 Taxman 517/ 332 CTR 489/ 225 DTR 241 (SC) Editorial: CIT v. Glowshine Builders and Developers Pvt. Ltd (2018) 405 ITR 540 (Bom)(HC), order of High Court set aside and matter remanded to Tribunal.
S. 28(i) : Business income-Capital gains-Full value of consideration-Stamp valuation-Capital asset-Business income or short-term capital gains-Sale of Development Rights in property-Stock in trade-Sale consideration received by builder was held to be assessable as business income-Provisions of S. 50C was held to be not applicable-Recorded in the balance sheet-Matter remanded to Tribunal for consideration afresh on merits to consider whether transaction a sale of capital assets or of stock-in-trade. [S. 2(14), 45,50C, 145, Art. 136]