JCIT(OSD), Circle - 10, Kolkata, Kolkata V. Tollygunge Estates Pvt. Ltd., Kolkata

ITA 1693/KOL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100253 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILOY BARAN SOM JCIT SRDR
• Keywords: Business income
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1693 - 1694 / KOL / 2011 ASSESSMENT YEARS:2006-07 & 2007-08 JCIT (OSD), CIRCLE- 10, P-7, CHOWRINGHEE SQUARE, 3 RD FLOOR, KOLKATA-700 069 V/S . TOLLYGUNGE ESTATES PVT. LTD., 1, HUMAYAN PLACE, KOLKATA-700 087 [ PAN NO.AABCT 1553 B ] /APPELLANT .. / RESPONDENT /BY ASSESSEE SANJAY BHATTACHARYA, FCA /BY REVENUE NILOY BARAN SOM, JCIT-SR-DR /DATE OF HEARING 17-11-2015 ! /DATE OF PRONOUNCEMENT 11-12-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH THE APPEAL FILED BY REVENUE ARE ARISING OUT O F ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA I N APPEALS NO.621, 1041/XII/CIR-10/08-09 BY DATED 20.09.2011. ASSESSME NTS WERE FRAMED BY DCIT, CIRCLE-10 KOLKATA U/S 143(3) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDERS DATED 31. 12.2008 AND 30.12.2009 FOR ASSESSMENT YEARS 2006-07 & 2007-08 RESPECTIVELY. 2. THESE TWO APPEALS FILED BY REVENUE RELATE TO SIN GLE ASSESSEE THEREFORE WE HEARD THEM AFTER CLUBBING TOGETHER FOR THE SAKE OF CONVENIENCE AND ADJUDICATING BY THIS COMMON ORDER. ITA NO.1693-94/KOL/2011 A.YS. 2006-07 & 2007-08 JCIT(OSD) CIR-10, KOL. V. TOLLYGUNGE ESTATES PVT . LTD. PAGE 2 FIRST WE TAKE UP ITA NO.1693/KOL/2011 FOR A.Y.2006- 07 3. FIRST ISSUE RAISED BY REVENUE IS THAT LD. CIT(A) ERRED IN TREATING THE BUSINESS PROFIT FROM SALE OF SHARES AS SHORT TERM C APITAL GAINS. 4. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PRIV ATE LIMITED COMPANY AND HAS INCOME UNDER HEAD OF PROPERTY, OTHER SOURCES, S HORT TERM CAPITAL GAINS (STCG), LONG TERM CAPITAL GAIN (LTCG) AND BUSINESS. DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS SOLD CERTAIN SHARES AND MUTUAL FUNDS, RESULTING THE STCG FOR AN AMOUNT OF RS. 86,58,516.00. THE AO HELD THE STCG AS BUSINESS INCOME CONSIDERING THE VOLUME AND FREQUENC Y OF TRANSACTIONS, THE ORGANIZED AND SYSTEMATIC MANNER FOR CARRYING OUT TH E SALE, PURCHASE OF SHARES. BESIDES THE AO FOUND THAT THE VALUE OF THE INVESTMENT SHOWN IN THE BOOKS OF THE ASSESSEE WAS JUST OF RS.1,32,280/- WHE REAS THE STOCK-IN-TRADE WAS SHOWN FOR AN AMOUNT 4,53,11,556/- WHICH PROVED THAT ASSESSEE WAS ENGAGED IN BUSINESS OF PURCHASE & SALE OF SHARES AN D UNITS OF MUTUAL FUNDS. THE ASSESSEE ALSO SUBMITTED THAT SUCH INCOME WAS AC CEPTED BY THE DEPARTMENT AS CAPITAL GAIN IN PAST. BUT THE AO OBSE RVED THAT SUCH INCOME WAS ACCEPTED BY THE DEPARTMENT WITHOUT EXAMINING THE IS SUE ON THIS LINE. ACCORDINGLY THE AO DISREGARDED THE CLAIM OF ASSESSE E OF STCG AND TREATED THE INCOME FROM THE SALE-PURCHASE OF SHARES AND MUT UAL FUNDS AS INCOME FROM BUSINESS FOR AN AMOUNT OF RS. 86,58,516/-. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO DELETED THE ADDITION MADE BY ASSESSING OFFICER BY O BSERVING AS FOLLOWS:- 5. REGARDING GROUND NOS. 1 & 2 WHICH RELATES TO CLA IM OF ASSESSEE REGARDING SHORT TERM CAPITAL GAIN ON SALE OF MUTUAL FUNDS AND SHARES, IT IS NOTICED THAT IN THE FINANCIAL YEAR UNDER CONSIDE RATION ASSESSEE HAS MADE ON INVESTMENT IN FORM OF MUTUAL FUNDS AND SHAR ES OUT OF INTEREST FREE FUNDS AVAILABLE WITH HIM AND HAS RECEIVED SUBS TANTIAL DIVIDEND OUT O RS.16,18,595/- FROM THIS INVESTMENT AND SHORT TER M GAIN TO THE EXTENT OF RS.86,58,516/- INCLUDING PROFIT ON MUTUAL FUNDS TO THE EXTENT OF RS.54,37,695/- AND ASSESSEE HAS BEEN SUBJECTED TO S TT ON THESE TRANSACTIONS ALTHOUGH THE ASSESSEE IS HAVING A PORT FOLIO OF SHARES IN ITA NO.1693-94/KOL/2011 A.YS. 2006-07 & 2007-08 JCIT(OSD) CIR-10, KOL. V. TOLLYGUNGE ESTATES PVT . LTD. PAGE 3 TRADING ACCOUNT ALSO WHERE ASSESSEE HAS SHOWN NET P ROFITS WHICH IS ACCOUNTED FOR IN THE PROFIT & LOSS ACCOUNT. THE ASS ESSEE HAS CONSISTENTLY MAINTAINED THESE ACCOUNTS SEPARATELY. I HAVE CAREFULLY CONSIDERED THE CASE LAWS RELIED UPON IN THE ASSESSM ENT ORDER AND CASE LAWS RELIED UPON BY ASSESSEE IN THE WRITTEN SUBMISS ION. THE ABOVE FACTUAL MATRIX AND THE DECISION OF HON'BLE ITAT G OPAL PUROHIT VS. JCIT WHICH HAS BEEN CONFIRMED BY BOMBAY HIGH COURT IN 228 CTR 582 AND SLP HAS BEEN DISMISSED BY HON'BLE SUPREME COURT . THE FACTS OF THE CASE ARE SIMILAR TO THE CASE OF GOPAL PUROHIT. THEREFORE, THE AO IS DIRECTED TO TREAT THE SALE OF SHARES AND MUTUAL FUN DS AS SHORT TERM CAPITAL GAINS IN ACCORDANCE WITH IT ACT, 1961 AND T AX ACCORDINGLY. THEREFORE, ASSESSEES GROUND NO. 1 & 2 ARE ALLOWED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. SHRI SANJAY BHATTACHARYA, LD. AUTHORIZED REPRESENTA TIVE APPEARING ON BEHALF OF ASSESSEE AND SHRI NILOY BARAN SOM, LD. DEPARTMEN TAL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. DR VEHEMENTLY RE LIED ON THE ORDER OF ASSESSING OFFICER WHEREAS LD. AR RELIED ON THE ORDE R OF LD. CIT(A). LD. AR SUBMITTED PAPER BOOK RUNNING INTO PAGES FROM 1 TO 1 61 AND SUBMITTED THAT THE ASSESSEE IS MAINTAINING TWO PORTFOLIOS ONE FOR STOC K IN TRADE AND OTHER FOR INVESTMENT. OUR ATTENTION WAS DRAWN ON PAGES 56 TO 59 OF PAPER BOOK WHERE THE DETAILS FOR SHORT TERM AND LONG TERM PROFIT WER E FURNISHED. 7. WE FIND FROM THE AFORESAID DISCUSSION AND SUBMIS SION THAT THE AO HAS TREATED STCG AS BUSINESS INCOME OF ASSESSEE CONSIDE RING THE VOLUME AND FREQUENCY OF THE TRANSACTIONS IN A SYSTEMATIC AND O RGANIZED MANNER. AS PER THE AO NUMEROUS TRANSACTIONS OF BUYING AND SELLING OF SHARES, UNITS OF MUTUAL FUNDS WERE CARRIED OUT BY THE ASSESSEE AND CONSTITU TES BUSINESS ACTIVITY OF ASSESSEE. IT WAS ALSO OBSERVED THAT MANY TRANSACTIO NS WERE COMPLETED WITHIN A SHORT SPAN OF TIME AND IN SOME CASES THE NEXT DAY . ACCORDINGLY THE AO HELD SUCH TRANSACTIONS CONSTITUTE THE BUSINESS THEREFORE THE PROFIT FROM SUCH TRANSACTIONS IS BUSINESS PROFIT. HOWEVER, WE FIND T HAT THE ASSESSEE WAS ITA NO.1693-94/KOL/2011 A.YS. 2006-07 & 2007-08 JCIT(OSD) CIR-10, KOL. V. TOLLYGUNGE ESTATES PVT . LTD. PAGE 4 MAINTAINING TWO PORTFOLIOS ONE IS FOR THE INVESTM ENT IN SHARES AND MUTUAL FUNDS AND OTHER FOR THE PURPOSE OF BUSINESS OF SALE -PURCHASE OF SHARES. THE ASSESSEE WAS MAINTAINING SEPARATE RECORDS FOR THE S HARES HELD AS STOCK-IN- TRADE AND FOR THE SHARES AS HELD INVESTMENT IN THE BOOKS OF ACCOUNT. ON THIS ISSUE THE LAW IS VERY CLEAR THAT ASSESSEE CAN CARRY OUT HIS BUSINESS IN SHARE TRADING BY MAINTAINING PORTFOLIO OF SHARES HOLD AS STOCK-IN-TRADE ALSO HOLD SHARES AS INVESTMENTS AND THERE IS NO PROHIBITION U NDER THE ACT. WE ALSO FIND FROM THE AUDITED BALANCE-SHEET OF ASSESSEE, WHEREIN AS PER SCHEDULE-F RECORDS THE DETAILS OF INVESTMENT AND SCHEDULE-G RE CORDS THE DETAILS OF STOCK- IN-TRADE BOTH DETAILS ARE PLACED AT PAGE 47 OF PAPE R BOOK. BESIDES THIS, WE ALSO FIND NO ADVERSE REMARKS FROM THE AUDITOR OF AS SESSEE REGARDING THE PORTFOLIO OF ASSESSEE. IN VIEW OF THE ABOVE, WE ARE INCLINED NOT TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THIS GROUND OF REVENUE S APPEAL IS DISMISSED. 8. NEXT GROUND IS AS REGARDS THAT LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY ASSESSING OFFICER U/S 40(A)(IA ) OF THE ACT. FACTS OF THE CASE ARE THAT DURING THE YEAR ASSESSEE HAS GIVEN A BUILDING ON RENT AND THE SAME WAS SHOWN AS INCOME UNDER THE HEA D HOUSE PROPERTY . BESIDES THIS, ASSESSEE WAS ALSO CHARGING FEES FOR S EVERAL SERVICES IN RESPECT OF BUILDING SUCH AS HIRE CHARGES, PROTECTION CHARGE S, SERVICE CHARGES, WATER SUPPLY CHARGES & MISC. RECEIPTS AND THE SAME WAS SH OWN AS INCOME UNDER THE HEAD BUSINESS . THE ASSESSEE CLAIMED EXPENSES FOR THE REPAIR AND MAINTENANCE IN RESPECT OF BUILDING AND FURNITURE DU RING THE YEAR FOR AN AMOUNT OF 40,70,426/-. THE AO FOUND THAT OUT OF THE SAID EXPE NSES, CERTAIN EXPENDITURE FOR AN AMOUNT OF RS.25,42,973/- FOR REP AIR OF FURNITURE AND BUILDING WERE LIABLE FOR THE DEDUCTION OF TDS AS THE PAYMENT WAS EXCEEDING MORE THAN 20,000/-. THE REPAIR EXPENSES FOR THE FURNITURE ARE RS. 269820.00 ONLY WHEREAS REPAIR EXPENSES FOR BUILDING ARE RS. 22,73, 153/-. ON QUESTION BY AO TO ASSESSEE ABOUT THE DISALLOWANCE OF EXPENSES UNDE R THE PROVISION OF TDS, ASSESSEE SUBMITTED THAT PAYMENTS WERE MADE TOWARDS THE PURCHASE OF MATERIALS FROM LOCAL MARKETS AND LABOUR CHARGES PAI D TO LOCAL MASONS DOES ITA NO.1693-94/KOL/2011 A.YS. 2006-07 & 2007-08 JCIT(OSD) CIR-10, KOL. V. TOLLYGUNGE ESTATES PVT . LTD. PAGE 5 NOT EXCEED 20,000/-. THEREFORE THE QUESTION OF DEDUCTING TDS D OES NOT ARISE. HOWEVER, AO DISREGARDED THE CLAIM OF ASSESSE E STATING THAT PAYMENTS TOWARDS MATERIAL AND LABOUR IS VERY MUCH A WORK CON TRACT THEREFORE SUBJECT TO THE PROVISIONS OF TDS AS PER SECTION 194-C OF THE A CT. ACCORDINGLY, AO DISALLOWED A SUM OF 25,42,973/- (RS. 2,69,820/- FOR REPAIR OF FURNITURE AND RS. 22,73,153/- FOR REPAIR OF BUILDING) ON WHICH TDS WA S REQUIRED TO BE MADE AND ADDED IT TO THE ASSESSEES TOTAL INCOME. 9. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO DELETED THE ADDITION PARTLY MADE BY AO BY OBSERVING IN PARA -6 OF HIS ORDER:- 6. REGARDING GROUND NO.4 WHICH RELATES TO DISALLOW ANCE OF RS.25,42,973/- UNDER THE HEAD REPAIR TO FURNITURE A ND BUILDING U/S. 40(A)(IA) OF IT ACT, 1961. THE ASSESSEE COMPANY HAS RECEIVED RENT AND OTHER SERVICE CHARGES TO THE EXTENT OF RS.37,51,361 /- IN THE FINANCIAL YEAR. FROM PROPERTY INCLUDING THE OTHER AMENITIES H AVE BEEN RENTED TO DUNLOP INDIA LTD., G.K.W. INDIA LTD., WHICH IS SHOW N IN THE BALANCE SHEET UNDER THE HEAD FIXED ASSETS WHICH INCLUDES LA ND, BUILDING FURNITURE, ELECTRICAL AND OFFICE EQUIPMENT INCLUDIN G GENERATOR, AIR- CONDITIONER ETC., I.E. ASSESSEE HAD RECEIVED COMPOS ITE NATURE OF INCOME WHICH THE COMPANY HAD SHOWN UNDER TWO HEADS OF INCO ME NAMELY HOUSE PROPERTY INCOME AND INCOME FROM BUSINESS. THE ASSESSEE HAD DEBITED RS.40,70,426/- AS EXPENDITURE UNDER THE HEA D REPAIRS AND MAINTENANCES. THE NATURE OF EXPENSES FOR WHICH DISA LLOWANCE HAS BEEN MADE TO THE EXTENT OF RS.25,42,973/- RELATES T O PURCHASE OF WOOD, BRICKS, CEMENT, SANITARY GOODS, PAINT, STONE ETC., AND PAYMENTS MADE TO SMALL TIME WORK CONTRACTORS UNDER THE HEAD LABOUR C HARGES AND ASSESSEE CONTENDED THAT SINCE THE PAYMENTS MADE TO CONTRACTORS IS LESS THAN RS.20,000/- EACH TO VARIOUS LABOUR CONTRA CTS, NO TDS IS REQUIRED TO BE DEDUCTED UNDER 194C ON THESE LABOR C ONTRACTS AND PROVISION OF TDS IS NOT APPLICABLE ON THE PURCHASE MADE OF VARIOUS ITEMS FOR REPAIR OF BUILDING. THE ASSESSEE COMPANY HAS PRODUCED COMPLETE CHART GIVING DETAILS OF NATURE OF THESE EX PENSES DURING APPELLATE PROCEEDINGS. KEEPING IN VIEW THE NATURE O F EXPENSES, NO TDS IS REQUIRED TO BE DEDUCTED ON THE PURCHASE OF CEMEN T, BRICKS, IRON, WOOD ETC., AND PAYMENT MADE TO CONTRACTORS FOR MINO R LABOUR WORK IS LESS THAN RS.20,000/- EACH AND IN THE WHOLE YEAR TH E PAYMENTS MADE TO ONE CONTRACTOR IS LESS THAN RS.50,000/- IN AGGREGAT E. THEREFORE, NO TDS IS REQUIRED TO BE DEDUCTED U/S. 194C ON THESE PAYME NTS MADE TO VARIOUS CONTRACTORS. HENCE, THE GROUND NO. 4 RELATI NG TO ADDITION MADE U/S. 40(A)(IA) OF THE I.T. ACT, 1961 IS ALLOWED ON THIS ACCOUNT. HOWEVER, ASSESSEE HAS TAKEN ADDITIONAL GROUND FOR DEDUCTION U/S. 24(A) RELATING ITA NO.1693-94/KOL/2011 A.YS. 2006-07 & 2007-08 JCIT(OSD) CIR-10, KOL. V. TOLLYGUNGE ESTATES PVT . LTD. PAGE 6 TO STATUTORY DEDUCTION OF 30% OF THE ANNUAL VALUE A MOUNTING TO RS.5,79,725/- FROM HOUSE PROPERTY INCOME. THE ASSES SEE HAS MADE THIS CLAIM OVER AND ABOVE, THE CLAIM MADE ON ACCOUN T OF REPAIRS DEBITED IN P & L A/C TO THE EXTENT OF RS.40,70,426/- WHICH INCLUDES REPAIR OF BUILDING, FURNITURE AND OTHER ASSETS FROM WHICH ASS ESSEE HAD RECEIVED RENT AND SERVICE CHARGES. THE AO IS DIRECTED TO RES TRICT THE DEDUCTION UNDER REPAIRS OF BUILDING GIVEN ON RENT (ASSESSABLE AS HOUSE PROPERTY INCOME) TO CLAIM OF STATUTORY DEDUCTION U/S. 24(A) TO THE EXTENT OF RS.579,725/-. NO FURTHER CLAIM OF REPAIRS RELATING TO BUILDING WHOSE INCOME IS ASSESSABLE UNDER THE HEAD OF PROPERTY INC OME SHOULD BE ALLOWED. THE AO IS DIRECTED TO SEGREGATE THE REPAIR S EXPENDITURE TO THE EXTENT OF RS.40,70,426/- UNDER THE HEAD BUILDING RE PAIR AND OTHER REPAIRS RELATING TO FURNITURE AND OTHER ASSETS SHOW N IN THE BALANCE SHEET AND BUILDING REPAIR SHOULD BE RESTRICTED TO RS.5,79 ,725/- ONLY AND THE BALANCE EXPENDITURE OF REPAIRS RELATING TO BUILDING SHOULD BE DISALLOWED AND ADDED BACK TO INCOME OF THE ASSESSEE SINCE NO F URTHER ALLOWANCE U/S. 24(A) IS ALLOWABLE WHICH EXCEEDS THE STATUTORY LIMIT OF 30% OF THE RENT RECEIVED. THEREFORE, THIS GROUND IS PARTLY ALL OWED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. DR VEHEMENTLY RE LIED ON THE ORDER OF AO AND SUBMITTED LD. CIT(A) HAS PASSED THE ORDER WITHO UT CALLING FOR REMAND REPORT FROM AO. THEREFORE LD. DR REQUESTED THE BENC H TO REFER THE MATTER TO THE FILE OF LD. CIT(A) SIMPLY FOR FRESH ADJUDICATIO N AFTER HAVING THE REMAND REPORT FROM THE AO. ON THE OTHER HAND, LD. AR RELIE D ON THE ORDER OF LD. CIT(A). FROM THE ABOVE DISCUSSION, WE FIND THAT ASS ESSEE DERIVED ITS INCOME FROM BUILDING GIVEN ON RENT AND FOR THE SAME BUILDI NG CERTAIN FACILITIES WERE GIVEN TO TENANTS FOR WHICH ASSESSEE WAS CHARGING SE RVICE FEE WHICH WAS SHOWN AS BUSINESS INCOME. THE AO DISALLOWED THE REP AIR EXPENSES FOR THE VIOLATION OF TDS PROVISIONS. THE LD. CIT(A) FOUND T HAT THE MOST OF THE EXPENSES WERE INCURRED FOR THE PURCHASE OF THE MATE RIALS AND LABOUR EXPENSES ALONE WAS NOT EXCEEDING THE SPECIFIED LIMI T MENTIONED UNDER SECTION 194C OF THE ACT. THEREFORE THE LD. CIT(A) A LLOWED THE APPEAL OF THE ASSESSEE. BUT BEFORE THE LD. CIT(A), THE ASSESSEE H AS TAKEN AN ADDITIONAL GROUND FOR THE DEDUCTION OF REPAIR AND MAINTENANCE OF BUILDING BY VIRTUE OF THE ITA NO.1693-94/KOL/2011 A.YS. 2006-07 & 2007-08 JCIT(OSD) CIR-10, KOL. V. TOLLYGUNGE ESTATES PVT . LTD. PAGE 7 PROVISIONS OF SECTION 24(A) OF THE ACT OVER AND ABO VE THE REPAIR EXPENSES IN RESPECT OF BUILDING. BUT THE LD. CIT(A) HAS, IN HIS ORDER, ALLOWED THE 30% OF ANNUAL VALUE OF THE BUILDING IN TERMS SECTION 24(A) OF THE ACT AND HELD THAT NO OTHER EXPENSES IN RELATION TO BUILDING REPAIR AND M AINTENANCE WILL BE ALLOWED. WE FIND FROM THE ORDER OF LD. CIT(A) THAT ALL THE R EPAIR AND MAINTENANCE EXPENSES CLAIMED BY THE ASSESSEE RELATE MOSTLY TO T HE PURCHASE OF THE MATERIAL AND THE COMPONENT OF THE LABOUR EXPENSES A LONE IS LESS THAN THE LIMIT SPECIFIED UNDER SECTION 194C OF THE ACT. FROM THE A FORESAID DISCUSSION WE FIND THAT LD. CIT(A) HAS PASSED THE CORRECT ORDER B Y ALLOWING DEDUCTION IN TERMS OF THE PROVISIONS OF SECTION 24(A). SUCH EXPE NSES ARE TO BE COMPULSORILY ALLOWED BY VIRTUE OF THE STATUTORY PROVISIONS AS PE R SECTION 24(A) OF THE ACT IRRESPECTIVE OF THE FACT WHETHER ASSESSEE ACTUALLY INCURS THE EXPENDITURE OR NOT. SINCE THE RENTAL INCOME FROM THE BUILDING IS C HARGED TO TAX UNDER THE HEAD OF HOUSE PROPERTY THEN NO EXPENSE IN RELATION TO BU ILDING REPAIR WILL BE ALLOWED WHILE CALCULATING THE BUSINESS INCOME. IN V IEW OF ABOVE, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A). THEREFO RE THE GROUND RAISED BY THE REVENUE IS DISMISSED. 11. NEXT GROUND OF REVENUES APPEAL IS AS REGARDS T O DELETE THE DISALLOWANCE OF SECURITY TRANSACTION TAX. AT THE TI ME OF HEARING, BOTH LD. AR AND LD. DR AGREED THAT THIS GROUND DOES NOT REQUIRE ANY ADJUDICATION BECAUSE IT IS CONSEQUENTIAL IN NATURE ON THE DECISION OF TR EATING THE INCOME EARNED BY ASSESSEE AS STCG OR BUSINESS INCOME. SINCE THE ISSU E HAS ADJUDICATED BY HOLDING THE PROFIT ON SALE AND PURCHASE OF SHARES A S STCG, SO THE AO IS DIRECTED TO GIVE EFFECT STT ACCORDINGLY. THIS GROUN D OF REVENUES APPEAL IS DISMISSED AS CONSEQUENTIAL IN NATURE. 12. IN THE RESULT, REVENUES APPEAL IS DISMISSED. COMING TO REVENUES APPEAL IN ITA NO.1694/KOL/2011 FOR A.Y. 07-08. 13. FIRST ISSUE IS AS REGARDS TO SALE OF SHARES AMO UNTING TO 95,76,382/- AS CAPITAL GAINS AND NOT AS BUSINESS INCOME. IN THIS G ROUND OF APPEAL, THE DISPUTE ITA NO.1693-94/KOL/2011 A.YS. 2006-07 & 2007-08 JCIT(OSD) CIR-10, KOL. V. TOLLYGUNGE ESTATES PVT . LTD. PAGE 8 HAS ALREADY BEEN ADJUDICATED BY US IN PARA-6 OF THIS ORDER IN ITA NO.1693/KOL/2011. HENCE, THIS GROUND OF REVENUES A PPEAL IS DISMISSED IN TERMS OF ABOVE. 14. IN COMBINE RESULT, BOTH APPEAL OF REVENUE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT 11/ 12/2015 SD/- SD/- (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP '#$- 11 /1 2 /2015 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-TOLLYGUNGE ESTATES PVT. LTD., 1, HUMAYAN PLACE, KOLKATA-87 2. /REVENUE-JCIT(OSD), CIR-10, P-7, CHOWRINGHEE SQ. 3 RD FLOOR, KOLKATA-69 3.#-#./ 0 / CONCERNED CIT KOLKATA 4. 0- / CIT (A) KOLKATA 5.2 3455./, ./!, / DR, ITAT, KOLKATA 6.489:; / GUARD FILE. BY ORDER/ , /TRUE COPY/ /# ./!,