Interpretation of a ruling

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ullas vijayvargeeya (Querist)
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25 July 2014 Respected experts my query is in respect of interpretation of a judgment wherein it was held

"Selling of own land after plotting it out in order to secure a better price is not in the nature of trade or business, more so when the land was gifted to the assessee".

[CIT v Suresh Chand Goyal 209 CTR 410 (MP)(2007) see also Ram Saroop Saini (HUF) v ACIT 15 SOT 470 (Del)(2007)]

My query is in regards to meaning of word "more so" what does it mean?

Whether it means if an asset is gifted only then in that case selling of land after plotting would be chargeable to capital gain.
or
Whether it gives a sound that if an asset is sold after plotting to secure better price even if it has not been so gifted i.e. acquired asset, it would be chargeable to capital gain

And also advise when plotting of an asset is chargeable to pgbp head

Nikhil Kaushik

Nikhil Kaushik (Expert)
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26 July 2014 the emphasis on "more so" is to imply that where the land was received as a gift, the case to charge the sale consideration as capital gains becomes much more stronger as it cannot be said that the asset was procured as a colonizer to make money through plotting.

so even if the asset is not gifted, sale of own land after plotting should not be considered as bgbp.

it would be covered as business income land is procured and kept as stock in trade and then plotted and sold.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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