ADDL CIT 2(1) CITY 2, MUMBAI V. THE ESTATE INVESTMET CO. P.LTD, MUMBAI

ITA 1105/MUM/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3323 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK A OJHA
• Assessee Lawyers: ARVIND SONDE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Business expenditure
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI RAM LAL NEG I (JM) ITA NO. 1105/MUM/2013 ASSESSMENT YEAR: 2009-10 THE DCIT - 2 (1), AAYAKAR BHAVAN, ROOM NO. 561, 5 TH FLOOR, M.K.ROAD, MUMBAI- 400020 VS. THE ESTATE INVESTMENT CO. P. LTD. SEKSARIA CHAMBER, 4 TH FLOOR, 139, NAGINDAS MASTER ROAD, MUMBAI- 400001. PAN- AAACE2556J (APPELLANT) (RESPONDENT) & CO NO. 65/MUM/2014 (A/W ITA 1105/MUM/2013) ASSESSMENT YEAR: 2009-10 THE ESTATE INVESTMENT CO. P. LTD. SEKSARIA CHAMBER, 4 TH FLOOR, 139, NAGINDAS MASTER ROAD, MUMBAI- 400001. PAN- AAACE2556J VS. THE DCIT - 2 (1), AAYAKAR BHAVAN, ROOM NO. 561, 5 TH FLOOR, M.K.ROAD, MUMBAI- 400020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. VIVEK A. OJHA RESPONDENT BY : SHRI. ARVIND SONDE. DATE OF HEARING: 07/01/2016 DATE OF PRONOUNCEMENT: 20/01/2016 2 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 O R D E R PER JASON P. BOAZ, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT (APPEALS)-4, MUMBAI DT. 30/11/2012 FOR ASST. YEAR 2 009-10. THE ASSESSEE HAS ALSO PREFERRED CROSS OBJECTION (CO) IN RESPECT OF THE AFORESAID ORDER OF THE CIT (APPEALS). 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER:- 2.1 THE ASSESSEE IS A COMPANY ENGAGED IN INVESTMENT IN DERIVATIVES, OTHER SECURITIES AND MONEY LENDING AND ALSO DERIVES INCOME FROM SALE OF LAND AND SALE OF RIGHTS IN LAND SITUATED IN BHAY ANDER, MIRA ROAD AND GHODBUNDER IN THANE DISTRICT, MAHARASHTRA. FOR ASST. YEAR 2009-10, THE ASSESSEE FILED ITS RETURN OF INCOME O N 30/09/2009 DECLARING INCOME OF RS. 2,80,70,760/-. THE RETURN W AS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. 2.2 FROM THE RECORD, IT IS SEEN THAT UP TO ASST. Y EAR 2008-09, THE INCOME OF THE ASSESSEE FROM TRADING IN DERIVATIVES AND OTHER SECURITIES WAS ASSESSED AS BUSINESS INCOME AND BUSINESS EXPENS ES WERE ACCORDINGLY ALLOWED. HOWEVER, IN THE YEAR UNDER CON SIDERATION, THE ASSESSING OFFICER (AO) OBSERVING THAT THERE IS A NOMINAL BUSINESS ACTIVITY HELD THAT THE EXPENSES CLAIMED WERE EXCESS IVE AND CONSEQUENTLY DISALLOWED THE BUSINESS EXPENSES CLAIM ED BY THE ASSESSEE. IN RESPECT OF THE ASSESSEES ACTIVITY OF SALE OF OWNERSHIP LANDS (KABJADAR LAND), THE AO HELD THEM TO BE BUS INESS ACTIVITY AND ALLOWED BUSINESS EXPENSES, MAKING THE ASSESSMENT TH EREUNDER ON A PROTECTIVE BASIS. APART FROM THIS, THE ASSESSEE IS ALSO RIGHT HOLDER (EKSALI LANDS) IN VARIOUS PLOTS OF LAND IN MIRA, BH AYANDAR AND 3 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 GHODBUNDER IN THANE DISTRICT, MAHARASHTRA. THE ASSE SSEE HAS OFFERED CAPITAL GAINS OR LOSS ON TRANSFER OF SUCH LANDS. TH E ASSESSEE ADOPTED THE COST AS ON 01/04/1981 AT MARKET VALUE AS PER RE GD. VALUERS REPORT AND THE CONSIDERATION RECEIVED AS FULL CONSI DERATION FOR KABJADAR LANDS. FOR EKSALI LANDS, THE COST AS ON 01/04/1981 WAS TAKEN AT 1/3 RD VALUE OF OWNERSHIPS LAND ON THAT DATE AS DETERMINE D BY THE REGD. VALUER AND THE CONSIDERATION RECEIVED BY THE ASSESSEE IS TAKEN AS THE TOTAL CONSIDERATION FOR TRANSFER THERE OF. ON THE CONTRARY, THE AO IN RESPECT OF KABJADAR LANDS HAS ADOPTED T HE SALE CONSIDERATION AS DETERMINED BY THE DISTRICT VALUAT ION OFFICER (DVO) U/S 55A OF THE ACT AS PER MARKET VALUE AND THE COST THEREOF AS ON 01/04/1981 AS DETERMINED BY THE DVO. IN RESPECT OF EKSALI LANDS, THE AO HAS TAKEN THE COST AS ON 01/04/1981 AT 10% O F THE OWNERSHIP LANDS IN THE RATIO OF THE RECKONER VALUE OF OWNERSH IP LANDS AND ACTUAL SALE CONSIDERATION OF EKSALI LANDS AS DECLARED BY T HE ASSESSEE. THE CAPITAL GAINS DECLARED BY THE ASSESSEE ON ACCOUNT O F KABJADAR LANDS HAVE ALSO BEEN ASSESSED BY THE AO AS BUSINESS INCOM E ON A PROTECTIVE BASIS. 2.3 IN ADDITION TO THE ABOVE, THE AO ALSO DISALLO WED BROKERAGE OF RS. 4 LACS AND PROFESSIONAL CHARGES OF RS. 25.28 LACS EXPENDED ON ACCOUNT OF LAND DEALINGS, WHILE COMPUTING THE CAPITAL GAINS . THE AO HAS ALSO MADE ON ADHOC ADDITION OF RS. 1.70CRORES WHILE COMP UTING LTCG ON SALE OF OWNERSHIP LAND U/S 50C OF THE ACT, EVEN THO UGH IT WAS NOT REGISTERED AND WITHOUT MAKING A REFERENCE TO THE DV O. THE AO ALSO ASSESSED AN AMOUNT OF RS. 1.95 CRORES AS CAPITAL GA INS IN RESPECT OF AN ADVANCE OF RS. 1,97,69,142/- RECEIVED AGAINST SA LE CONSIDERATION OF RS. 2,00,50,000/-. IN THE MANNER LAID OUT IN PARAS 2.1 TO 2.3 OF THIS ORDER (SUPRA), THE AO CONCLUDED THE ASSESSMENT FOR ASST. YEAR 2009-10 U/S 143(3) OF THE ACT VIDE ORDER DT. 30/12/2011, WH EREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS. 10,54,79,550/ - AND THE 4 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 ASSESSMENT OF BUSINESS INCOME ON PROTECTIVE BASIS W AS DETERMINED AT RS. 6,28,08,800/-. 3. AGGRIEVED BY THE ORDER OF ASSESSMENT FOR ASST. Y EAR 2009-10 DT. 30/12/2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS)- 4, MUMBAI RAISING VARIOUS GROUNDS. THE LD. CIT(A) D ISPOSED OFF THE APPEAL BY ORDER DT. 30/11/2012 ALLOWING THE ASSESSE E PARTIAL RELIEF. 4. REVENUE, BEING AGGRIEVED BY THE ORDER OF THE C IT(APPEALS)- 4, MUMBAI DT. 30/12/2011, HAS PREFERRED THIS APPEAL RA ISING THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND FA CTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF E XPENDITURE UNDER THE HEAD BUSINESS INCOME EVEN WHEN THERE IS H ARDLY ANY ACTIVITY RELATING TO DERIVATIVES AND FINANCE DURING THE PREVIOUS YEAR. 3. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN TREATING THE SALE CONSIDERATION RECEIVED ON SALE OF OWNERSHIP LAND AS BUSINESS INCO ME. THE LD. CIT(A) DID NOT APPRECIATE THE FACT THAT THE LAND WA S OWNED BY THE ASSESSEE FOR A LONG PERIOD OF TIME AND IT HAD S HOWN IN THE BALANCE SHEET AS INVESTMENTS. (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN APPRECIATING THE F ACT THAT THE PROVISION OF SECTION 50C OF THE IT ACT IS CODE BY I TSELF AND 5 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 APPLICABLE ON THE SALE OF A CAPITAL ASSET IN COMPUT ING THE LONG TERM CAPITAL GAIN. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN COMING TO A CONCLUSION THAT THE AO HAS ALLOWED ALL THE EXPENSES CLAIMED BY THE ASSESSE E AS THE COMPUTATION HAS STARTED FROM NET PROFIT, THEREBY OV ERLOOKING THE FACT THAT THERE IS A DISALLOWANCE MADE BY THE AO OF AN IDENTICAL AMOUNT IN THE COMPUTATION FORMING PART OF THE ORDER . 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT INCOME FRO M TRANSFER OF OWNERSHIP LANDS IS TO BE ASSESSED AS BUSINESS INCOM E, THEREBY OVERLOOKING THAT THE FACT THE ASSESSEE HAD SHOWN IT AS INCOME FROM CAPITAL GAINS AND HE ASSESSING OFFICER ALSO HA D ASSESSED IT UNDER THE HEAD CAPITAL GAINS. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET A SIDE AND THAT OF THE AO RESTORED. 4. THE GROUNDS AT SR. NOS: 1 AND 6 ARE GENERAL IN NATURE AND THEREFORE NO ADJUDICATION IS CALLED FOR THEREON. 5. GROUNDS NO. 2 5.1 IN THIS GROUND, REVENUE CONTENDS THAT THE LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSEES CLAIM OF EXPENDITURE UNDER THE HEAD BUSINESS INCOME EVEN THOUGH THERE WAS HARDLY ANY AC TIVITY RELATING TO DERIVATIVES AND FINANCE DURING THE PREVIOUS YEAR TO JUSTIFY THAT THE EXPENDITURE WAS INCURRED FOR BUSINESS PURPOSES . THE LD. DR 6 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 WAS HEARD IN THE MATTER AND SUPPORTED THE ACTION OF THE AO IN DISALLOWING THE SAID EXPENDITURE ON THE GROUNDS THA T THERE IS NO SUFFICIENT BUSINESS ACTIVITY OR INCOME THEREFROM, T O JUSTIFY THE VOLUMINOUS EXPENSES CLAIMED UNDER THE HEAD BUSINESS INCOME. 5.2 PER CONTRA, THE LD. AR SUPPORTED THE ORDER OF THE LD. CIT(A) IN ALLOWING THE EXPENDITURE CLAIMED AGAINST BUSINESS I NCOME DURING THE YEAR UNDER CONSIDERATION. IT WAS SUBMITTED THAT THE SAME BUSINESS ACTIVITY HAS BEEN CARRIED OUT BY THE ASSES SEE IN THE PAST AND SIMILAR EXPENSES HAD BEEN INCURRED AND WERE ACC EPTED BY THE DEPARTMENT. IT IS CONTENDED THAT THERE IS NO REASON WHATSOEVER FOR THE AO TO MAKE THE SAID DISALLOWANCE BASED ON CONJE CTURES AND SURMISES. IT WAS SUBMITTED BY THE LD. AR THAT A MER E REDUCTION IN THE REVENUES WOULD NOT WARRANT DISALLOWANCE OF BUSI NESS EXPENSES CLAIMED WHICH ARE FIXED IN NATURE FROM YEAR TO YEAR . IT WAS ARGUED THAT THE LD. CIT(A) AFTER EXAMINING THE ISSUE IN DE TAIL HAS OBSERVED THAT THE ASSESSED IS IN THE BUSINESS OF DERIVATIVE TRANSACTIONS, OTHER SECURITIES AND MONEY LENDING FOR THE LAST 2 DECADES, BUT THOUGH THEIR REVENUES HAVE REDUCED CONSIDERABLY REC ENTLY, THE ASSESSEES BUSINESS ACTIVITY IS IN EXISTENCE IN THE YEAR UNDER CONSIDERATION. THE LD. AR SUBMITS THAT IT IS IN THI S CONTEXT THAT THE LD. CIT(A) ALLOWED THE EXPENSES NECESSARY FOR BOTH MAINTAINING THE CORPORATE EXISTENCE OF THE ASSESSEE AND FOR THE ASSESSEES TRADE IN DERIVATIVES, OTHER SECURITIES AND MONEY LE NDING. 5.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. FROM THE DETAIL S ON RECORD, IT EMERGES THAT THE ASSESSEE HAS BEEN IN THE BUSINESS OF DERIVATE TRANSACTIONS, OTHER SECURITIES AND MONEY LANDING F OR OVER TWO DECADES AND THAT THE INCOME FROM SUCH TRANSACTIONS HAVE ALL ALONG BEEN DECLARED AND ASSESSED AS BUSINESS INCOME. AS O BSERVED BY 7 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 THE AUTHORITIES BELOW, THE INCOME/REVENUE AND VOLUM E OF SUCH TRANSACTIONS HAS REDUCED CONSIDERABLY IN THE YEAR U NDER CONSIDERATION, WHEREAS THE EXPENDITURE CLAIMED AGAI NST MEAGRE INCOME WAS SUBSTANTIAL AND NOT JUSTIFIED. IT IS SEE N THAT THE AO INSPITE OF ACKNOWLEDGING THAT THE ASSESSEES BUSI NESS ACTIVITY IN TRADING OF SECURITIES, DERIVATES AND MONEY LENDING STILL CONTINUES IN THIS YEAR ALSO, THOUGH ON A SMALLER SCALE, PROCEEDE D TO SUMMARARILY DISALLOW THE ENTIRE EXPENDITURE CLAIMED IN THIS REGARD ON THE GROUND THAT THE SAME WERE NOT INCURRED FOR BUSINESS PURPOSES. THIS ACTION OF THE AO, IN OUR VIEW, WAS NOT WARRANTED , IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS IT WAS BASED SOLELY ON SUMMARIES AND CONJECTURES . 5.3.2 WE FIND IN THE IMPUGNED ORDER, THAT THE LD. CIT(A) HAD NOTED THAT THE BUSINESS ACTIVITY OF THE ASSESSEE CONTINUES AND THEREFORE THE RELEVANT CORRESPONDING EXPENDITURE IS ALLOWABLE. WH ILE OBSERVING THAT THE EXPENDITURE CLAIMED BY THE ASSESSEES IN I TS BUSINESS OF TRADING IN DERIVATES, OTHER SECURITIES AND MONEY LE NDING WAS SUBSTANTIAL WHEN COMPARED TO MEAGRE INCOME/REVENUE THEREFROM, THE LD. CIT(A) HELD THAT THE EXPENDITURE NECESSARY FOR MAINTAINING THE ASSESSEES CORPORATE EXISTENCE OR EXPENDITURE R ELATING TO THE ASSESSEES TRADE IN DERIVATES, SECURITIES AND MONE Y LENDING ARE TO BE ALLOWED. THE FINDING OF THE LD. CIT(A), IN OUR C ONSIDERED VIEW, IS REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE CA SE. BEFORE US, EXCEPT FOR RAISING THIS GROUND, REVENUE HAS FILED T O CONTROVERT THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. IN THIS VI EW OF THE MATTER, WE UPHOLD THE FINDING OF THE LD. CIT(A) THAT SINCE THE BUSINESS ACTIVITY OF THE ASSESSEE IN TRADING OF DERIVATES, OTHER SECU RITIES, AND MONEY LENDING CONTINUES IN THE YEAR UNDER CONSIDERATION, EVEN THOUGH ON A MUCH REDUCED VOLUME AND SCALE, THE EXPENDITURE CL AIMED IN RESPECT OF SUCH BUSINESS INCOME IS TO BE ALLOWED TO THE EXTENT THAT 8 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 THEY ARE NECESSARY FOR MAINTAINING THE CORPORATE EX ISTENCE OF THE ASSESSEE OR THOSE EXPENSES WHICH ARE RELATED TO S UCH BUSINESS. CONSEQUENTLY, GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED. 6. GROUNDS NO. 3 AND 5 6.1 IN THESE GROUNDS, WHICH ARE INTERCONNECTED, RE VENUE CONTENDS THAT THE LD. CIT(A) ERRED IN TREATING THE SALE CONSIDERA TION RECEIVED ON SALE OF OWNERSHIP LAND AS BUSINESS INCOME, WITHOU T APPRECIATING THE FACT THAT THE LANDS WERE OWNED BY THE ASSESSEE FOR A LONG PERIOD OF TIME, AND BEING SHOWN AS AN INVESTMENT IN THE BALANCE SHEET, AS SUCH IT SHOULD HAVE BEEN ASSESSED AS CAPI TAL GAINS. IT WAS ALSO CONTENDED THAT THE PROVISIONS OF SECTION 5 0C WERE APPLICABLE ON SALE OF CAPITAL ASSETS FOR COMPUTATIO N OF LTCG. IT WAS FURTHER CONTENDED THAT THE LD CIT(A) WRONGLY HE LD THAT THE AO HAD ALLOWED THE EXPENSES CLAIMED BY THE ASSESSEE A T PARA 9 OF THE ORDER OF ASSESSMENT. THE LD. DR SUPPORTED THE GROUN DS RAISED AND PLACED STRONG RELIANCE ON THE ORDER OF THE AO ON TH ESE ISSUES. 6.2 PER CONTRA, THE LD. AR FOR THE ASSESSEE SUPPO RTED THE FINDINGS IN THE ORDER OF THE LD. CIT(A). 6.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT IS SEEN FROM THE ORDER OF ASSESSMENT THAT THE ASSESSEE HAD DECLARED THE INCOM E FROM SALE OF OWNERSHIP LANDS AS CAPITAL GAINS/LOSS. THE AO WHI LE COMPLETING THE ORDER OF ASSESSMENT, AT PARA 9 THEREOF HAS ALSO ASSESSED THE INCOME FROM SALE OF OWNERSHIP LANDS AS BUSINESS I NCOME ON A PROTECTIVE BASIS, WHILE AT THE SAME TIME ACCEPTING THE SAME AS CAPITAL GAINS AS DECLARED BY THE ASSESSEE IN THE RE TURN OF INCOME. WE FIND THAT ON APPEAL, THE LD. CIT(A) OBSERVING TH AT SINCE THE 9 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 ACTIVELY OF SALE OF OWNERSHIP LANDS PLOTS WAS QUI TE FREQUENT, THAT THE LAND WAS TREATED AS STOCK-IN-TRADE AND THE ASSE SSEE HAD TO EXECUTE CONVEYANCE DEEDS AND MAINTAIN ITS RIGHTS AND IN THIS CONTEXT REQUIRES LEGAL CONSULTATION AND OTHER EXPEN SES TO BE INCURRED; CONCURRED WITH THE VIEW OF THE AO THAT THE INCOME FROM SALE OF OWNERSHIP LANDS IS BUSINESS INCOME . EXCE PT FOR RAISING THE GROUND THAT INCOME FROM SALE OF OWNERSHIP LANDS S HOULD BE ASSESSED AS CAPITAL GAINS, SINCE THE ASSESSEE HAD D ECLARED THE SAME AS INCOME FROM CAPITAL GAINS, NO COGENT REASON S OR EVIDENCE HAS BEEN PUT FORTH BY THE LD. DR TO CONTROVERT THE FACTUAL FINDINGS OF THE LD. CIT(A) AND ALSO THOSE OF THE AO THAT THE INCOME FROM SALE OF OWNERSHIP LANDS IS TO BE ASSESSED AS BUSINESS INCOME. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED AB OVE, WE CONCUR WITH THE FINDINGS AND REASONING OF THE LD. CIT(A) T HAT, IN VIEW OF THE FREQUENCY OF SALE OF OWNERSHIP LANDS; THE FAC T THAT THE SAME WAS TREATED AS STOCK-IN-TRADE AND THE EXTENT OF EXP ENSES INVOLVED TO EXECUTE CONVEYANCE DEEDS, MAINTAIN ITS RIGHTS AN D LEGAL AND OTHER EXPENSES INCURRED IN THIS REGARD, WE UPHOLD T HE VIEW OF THE LD. CIT(A) THAT THE INCOME FROM SALE OF OWNERSHIP LANDS IS TO BE ASSESSED AS BUSINESS INCOME . WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, GROUNDS AT SR. NO. 3(A) AND 5 ARE DIS MISSED. 6.3.2 IN RESPECT OF REVENUES AVERMENT THAT THE LD. CIT(A) HAS ERRED IS NOT APPRECIATING THAT THE PROVISIONS OF SECTION 50 C OF THE ACT WERE APPLICABLE ON SALE OF CAPITAL ASSETS FOR COMPUTING LTCG, WE FIND FROM A PERUSAL OF THE IMPUGNED ORDER THAT THE LD. CIT(A) HAS RENDERED NO SUCH FINDING. THE LD. CIT(A) HAS IN FA CT HELD THAT THE PROVISIONS OF SECTION 50C OF THE ACT ARE NOT APPLIC ABLE IN THE CASE OF IN CASE BUSINESS INCOME IN VIEW OF THE DECISION OF INTER ALIA , INDRALOK HOTELS P. LTD.(32 SOT 419)(MUM). WE THEREF ORE REJECT GROUND NO.3 (B) RAISED BY REVENUE. 10 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 6.3.3. IN RESPECT OF REVENUES CLAIM IN GROUNDS NO. 4, THAT THE LD. CIT(A) ERRED IN CONCLUDING THAT THE AO HAS ALLOWED ALL THE EXPENSES CLAIMED BY THE ASSESSEE, AFTER AN APPRECIATION OF T HE DETAILS ON RECORD, WE CONCUR WITH THE OBSERVATION OF THE LD. CIT(A) THAT THE AO AT PARA 9 OF THE ORDER OF ASSESSMENT, WHILE ASSE SSING THE TRANSFER OF OWNERSHIP LANDS AS BUSINESS INCOME, H AS ALLOWED ALL EXPENSES CLAIMED BY THE ASSESSEE IN REGARD TO TRAN SFER OF LANDS. WE ALSO FIND THAT THE AO HAS OBSERVED THAT THE VARI OUS COMPONENTS OF INCOME AND EXPENSES IN RESPECT OF TRA NSFER OF OWNERSHIP LANDS LEFT HIM WITH NO OTHER OPTION THAN TO CONCLUDE THAT LAND DEALINGS CONSTITUTE THAT MAIN BUSINESS OF THE ASSESSEE AND THAT THE NATURE OF EXPENSES ARE SUCH THAT IT IS APPARENT THAT THE ASSESSEE HAS BEEN EMPLOYING VARIOUS RESOURCES F OR MAINTAINING ITS RIGHTS IN LAND, FOR DISPOSING THE ASSETS THROUG H LAWYERS, BROKERS, EMPLOYEES, DIRECTORS ETC. IN THIS FACTUAL MATRIX AS LAID OUT ABOVE, WE CONCUR WITH THE ORDER OF THE LD. CIT(A) I N HOLDING THAT ALL EXPENSES, OTHER THAN THAT PART OF THE LEGAL EXPENSE S, RELATING TO EKSALI LANDS AND THOSE FOR MAINTAINING THE CORPO RATE EXISTENCE OF ASSESSEE AND FOR THE ASSESSEES TRADING IN DERIVAT IVES, OTHER SECURITIES AND MONEY LENDING, ARE TO BE ALLOWED AG AINST BUSINESS INCOME FROM SALE OF OWNERSHIP LANDS. WE CONSEQUEN TLY DISMISS GROUND NO: 4 RAISED BY THE ASSESSEE. 7. IN THE RESULT, REVENUES APPEAL FOR ASST. YEAR 2009-10 IS DISMISSED. 8. THE ASSESSEE HAS ALSO RAISED CO NO. 65/MUM/2014 IN RESPECT OF THE ORDER OF THE CIT(A)-4, MUMBAI DT. 30/11/2012 FOR AS ST. YEAR 2009- 10. WE HAVE PERUSED THE GROUNDS AT SR. NO. 1 TO 3 R AISED IN THE C.O AND FIND THAT THEY DO NOT CHALLENGE ANY MATTER PERTAINING TO THE IMPUGNED ORDER OF THE LD. CIT(A) AND ARE RATHER SUPPORTIVE 11 ITA NO. 1105/MUM/2013 CO 65/MUM/2014 ASSESSMENT YEAR: 2009-10 THEREOF. IN THESE CIRCUMSTANCES, SINCE REVENUES AP PEAL FOR ASST. YEAR 2009-10 STANDS DISMISSED, THE CO IS RENDERED I NFRACTUOUS AND IS ACCORDINGLY DISMISSED. 9. IN THE RESULT BOTH THE REVENUES APPEAL AND THE ASSESSEES CROSS OBJECTIONS FOR ASST. YEAR 2009-10 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2016 SD/- SD/- ( RAM LAL NEGI ) (JASON P.BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 20/01/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. '#$ % , %' , / DR, ITAT, MUMBAI 6. $() * / GUARD FILE. + + + + / BY ORDER, + //TRUE COPY// , ,, ,/ // /+- . +- . +- . +- . (DY./ASSTT. REGISTRAR) %' %' %' %', , , , / ITAT, MUMBAI PRAMILA