Income From Sale Of Immovable Properties To Be Treated As 'Capital Gains,' Not 'Business Income': Kerala High Court

The Kerala High Court ruled that income from the sale of immovable properties should be treated as capital gains and not business income. The case involved a taxpayer who sold several properties and reported the income as capital gains. The assessing officer had reclassified the income as business income, arguing that the taxpayer was engaged in the business of property trading. The court found that the taxpayer’s intention was to hold the properties as investments and not as stock-in-trade. This decision clarifies the distinction between capital gains and business income in property transactions and ensures proper tax treatment.