If the assessee failed to prove that the purchase was made for commercial purposes, the plot purchase cannot be kept as stock in trade: ITAT

The assessee-line individual’s of work involved performing minor civil construction projects. The assessee submitted a return of income stating income from wages and real estate during the pertinent assessment year and purchased three land plots for a very low price.
The Assessing Officer (AO) discovered the assessee had purchased three plots at a price far below their market worth during the scrutiny processes and issued a statutory notice. In response, the assessee argued that the plots were bought as stock-in-trade rather than as a capital asset because they were intended for later resale. Unhappy with the response, AO added to the income in accordance with section 56(2)(vii)(b) and calculated the tax liability in that manner.
The amendments made by AO were upheld by the CIT(A) on appeal. The resentful assessee chose to appeal to the Mumbai Tribunal.

The Tribunal ruled that a number of variables, such as the goal of holding, frequency of transactions, volume of transactions, treatment in books of account, etc., determine whether a transaction should be classified as a capital asset or stock in trade. The assessee argued that although he had never traded in land parcels, they were classified as stock. This purchase was a one-time event, and it cannot be viewed as a regular exchange of goods or services.
According to the explanatory notes included in CBDT Circular No. 01/2011, section 56(2)(vii)(b) only applies when the beneficiary is holding the property as a capital asset.
In this instance, the assessee failed to provide evidence of the fact that he views such plots as his company’s bread and butter. It is insufficient and inappropriate to classify the plots as stock-in-trade based solely on the assumption that they will be sold again.
As a result, the Tribunal upheld the CIT(Aorder )’s and taxed the income in accordance with section 56(2)(vii) (b).

Income-tax return forms for AY 2023–24 are announced by CBDT.
The Central Board of Direct Taxes (CBDT) has announced the Income-tax Return Forms (ITR Forms) for Assessment Year 2023–24 by Notices No. 04 & 05 of 2023, dated 10.02.2023 and 14.02.2023. These ITR forms will become effective on April 1, 2023, and their early announcement intends to make it easier to file returns at the beginning of the next Assessment Year.
The ITR Forms for the current year have remained virtually unaltered from the ITR Forms for the previous year in order to streamline the tax return filing procedure and increase convenience for taxpayers. The Income-tax Act, 1961 revisions have only required the barest modifications, which have be