VIPIN P MEHTA, MUMBAI V. ITO WD 24(3)(4), MUMBAI

ITA 7235/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1842 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANATHIR GUPTA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Opportunity of being heard; Corroborative evidences
• Section: 143(3); 50C; 133(6); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH , JUDICIAL MEMBER ITA NO. 7235/MUM/2014 (ASSESSMENT YEAR: 2010-11) SHRI VIPIN P. MEHTA VS. INCOME TAX OFFICER - 24(3)(4) GALA NO. 3, MUNICIPAL ESTATE V.P. ROAD, VILE PARLE (W) MUMBAI 400063 MUMBAI PAN AADPM9382L APPELLANT RESPONDENT APPELLANT BY: SHRI SATISH MODY RESPONDENT BY: SHRI RANATHIR GUPTA DATE OF HEARING: 01.11.2016 DATE OF PRONOUNCEMENT: 18.11.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 34, MUMBAI DATED 30..09.2014 FOR A.Y. 2010-11. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE (PROPRIETOR V.P. MEHTA & CO.), STA TED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING AND PRINTING OF PACKA GING MATERIAL AND CONSTRUCTION, FILED RETURN OF INCOME FOR A.Y. 2010 -11 ON 13.10.2010 DECLARING TOTAL INCOME OF ` 17,93,831/- FROM BUSINESS, CAPITAL GAINS AND FROM OTHER SOURCES. THE CASE WAS TAKEN UP FOR SCRUT INY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT VIDE ORDER DATED 19.03.2013, WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT ` 1,04,18,910/- IN VIEW OF THE FOLLOWING ADDITIONS/DI SALLOWANCES: - (I) SHORT TERM CAPITAL G A IN S (STCG) ` 84,75,112/ - (II) DISALLOWANCE OF 10% OF WAGES ` 38,334/ - (III) DISALLOWANCE OF EXCESS INTEREST PAID ` 1,05,628/ - (IV) ADDITION HOC DISALLOWANCE OF EXPENSES ` 20,000/ - ITA NO. 7235/MUM/2014 SHRI VIPIN P. MEHTA 2 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 13.1 0.2010 FOR A.Y. 2010-11, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A)-34, MUMBAI. THE LEARNED CIT(A) DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDER DATED 30.09.2014. 3. AGGRIEVED BY THE ORDER OF THE CIT(A)-34, MUMBAI DAT ED 30.09.2014 FOR A.Y. 2010-11, THE ASSESSEE HAS PREFERRED THIS A PPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS: - 1. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ORDER OF - THE ASSESSING OFFICER IN RESPECT OF THE PROFIT ON SALE ON INDUSTRIAL GALA AS CAPITAL GAIN I NSTEAD OF BUSINESS INCOME AS DECLARED BY THE APPELLANT. 2. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND O N FACTS IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER FOR A PPLYING SECTION 50C OF THE INCOME TAX ACT,1961 FOR DETERMINING THE SALES CONSIDERATION OF INDUSTRIAL GALA WHICH WAS CONSIDER ED AS BUSINESS TRANSACTIONS BY THE APPELLANT IN THE RETURN OF INCO ME FILED. 3. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND O N FACTS IN CONFIRMING THE DISALLOWANCE OF RS.30,67,396/- OUT O F COST OF CONSTRUCTION OF RS.46,33,364/- AS NON GENUINE WITHO UT PROPERLY CONSIDERING THE FACTS THAT ALL THE PAYMENT S TOWARDS CONSTRUCTION COSTS HAVE BEEN MADE BY PAYEES ACCOUNT CHEQUE AND SUPPORTED BY BILLS AND VOUCHERS WHICH ARE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS. 4. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND O N FACTS IN CONFIRMING THE ORDER O THE ASSESSING OFFICER PASSED WITHOUT CONSIDERING THE EVIDENCE SUBMITTED DURING THE COURSE OF THE ASSESSMENT AND SIMPLY RELYING ON THE NOTICE U/S 133 (6) OF THE INCOME TAX ACT, L96L ISSUED BY HIM HAVE NOT BEEN EI THER SEVERED OR NOT COMPLIED BY THE CONCERNED PARTIES. 5. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND O N FACTS IN CONFIRMING THE DISALLOWANCE OF RS.38,344/- BEING 10 % OF THE WAGES WITHOUT PROPERLY CONSIDERING THE FACTS THAT T HE EMPLOYEES HAVE BEEN PAID AS PER THE RECORD MAINTAINED AND THE DETAILS OF THE SAME HAVE BEEN FILED DURING THE COURSE OF THE P ROCEEDINGS. 6. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND O N FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 1,05,628/- BEING INTEREST PAID IN EXCESS OF 12% FOR THE LOANS TAKEN BY THE APPELLA NT FOR HIS BUSINESS WITHOUT PROPERLY CONSIDERING THE FACTS THA T THE INTEREST HAS BEEN PAID BY PAYEES ACCOUNT CHEQUE AND BEING NO RMAL MARKET RATE PREVAILING DURING THE RELEVANT PERIOD. 7. THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE ADDITIONAL GROUND FILED BY THE APPE LLANT ON 23 RD APRI1, 2014 AS DETAIL BELOW : ITA NO. 7235/MUM/2014 SHRI VIPIN P. MEHTA 3 ' 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW A ND ON FACTS IN NOT REDUCING THE PROFIT FROM SALE OF GALA AMOUNTING TO RS.22,00,716/- AS COMPUTED BY THE APPE LLANT IN THE ORIGINAL RETURN OF INCOME WHILE TREATING THE PROFIT FROM SALE OF GALA AS CAPITAL GAINS.' 4. GROUND NO. 1 PROFIT ON SALE OF PROPERTY BUSINES S INCOME OR CAPITAL GAIN 4.1 IN THIS GROUND, THE ASSESSEE ASSAILS THE IMPUGN ED ORDER OF THE LEARNED CIT(A) IN UPHOLDING THE ORDER OF THE ASSESS ING OFFICER (AO) IN RESPECT OF PROFIT ON SALE OF GALA AS CAPITAL GAINS INSTEAD OF BUSINESS INCOME DERIVED FROM DEVELOPMENT RIGHTS GRANTED AS CLAIMED BY THE ASSESSEE. THE LEARNED A.R. OF THE ASSESSEE REITERATED THE SUBMISS IONS PUT FORTH BEFORE THE AUTHORITIES BELOW ON THIS ISSUE. ACCORDING TO THE L EARNED A.R., THE ASSESSEE IS REGULARLY CARRYING ON THE BUSINESS OF MANUFACTUR ING ACTIVITY OF PACKAGING MATERIAL AT ITS FACTORY PREMISES AT BHAYA NDER. VIDE AGREEMENT DATED 01.11.2007 TITLED AGREEMENT FOR DEVELOPMENT THE ASSESSEE TOOK OVER THE ENTIRE LAND OF A DILAPIDATED BUILDING ALON GWITH DEVELOPMENT RIGHTS FOR ` 11 LAKHS. AFTER INCURRING EXPENDITURE OF ` 57,99,284/- AS COST OF IMPROVEMENT, ETC. THE RESULTANT INDUSTRIAL GALA WAS SOLD VIDE AGREEMENT DATED 30.12.2009 TO SHRI BHARAT R. THAKKAR AND SHRI TANNA THAKKAR FOR A CONSIDERATION OF ` 80 LAKHS. IT IS CONTENDED THAT THE ASSESSEE HAD NOT PURCHASED THE SAID PROPERTY BUT ONLY THE DEVELOPMEN T RIGHTS AND THEREFORE HAD NO INTENTION TO PURCHASE CAPITAL ASSETS AND THE REFORE IN THESE CIRCUMSTANCES IT IS CLEAR THAT THE INTENTION OF THE ASSESSEE WAS OF CONSTRUCTION OF GALA AND SALE THEREOF. THEREFORE, T HE ASSESSEES CLAIM THAT THE PROFIT ON SALE OF THE GALA IS TO BE TREATED AS BUSINESS INCOME MAY BE ALLOWED. 4.2 PER CONTRA, THE LEARNED D.R. FOR REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. ACCORDING TO THE L EARNED D.R., IT IS EVIDENT FROM PERUSAL OF THE AGREEMENT DATED 01.11.2007, THA T THE ASSESSEE HAS ACQUIRED THE SAID PROPERTY ALONGWITH THE RIGHTS OF DEVELOPMENT OF THE DILAPIDATED BUILDING WHICH WAS IMPROVED/CONVERTED T O A GALA. THIS ENVISAGES THAT THE ASSESSEE STEPS INTO THE SHOES OF THE OWNER OF THE PROPERTY, WHATEVER MAY BE THE NOMENCLATURE GIVEN TO THE AGREEMENT. IN THIS REGARD, THE LEARNED D.R. DREW THE ATTENTION OF THE BENCH TO THE SALE ITA NO. 7235/MUM/2014 SHRI VIPIN P. MEHTA 4 DEED DATED 30.12.2009 OF THE SAME PROPERTY (COPY PL ACED AT PG. 2 TO 20 OF THE PAPER BOOK) WHEREIN AT PAGE 11 THIS AGREEMENT H AS BEEN SIGNED, SEALED AND DELIVERED BY OWNER SHRI V.P. MEHTA; THE ASSES SEE IN THE CASE ON HAND TO THE PURCAHSER, BHARAT R. THAKKAR AND TANN A B. THAKKAR. THIS CLEARLY PROVES THAT THE ASSESSEE BECAME ISPO F ACTO OWNER OF THIS PROPERTY VIDE AGREEMENT DATED 01.11.2007 NO MATTER THE NOMENCLATURE OF DEVELOPER/DEVELOPMENT, ETC. GIVEN IN THIS AGREEMENT . IT IS FURTHER CONTENDED THAT IF THE TRANSACTIONS IN RESPECT OF TH E PROPERTY SHOWED THE ASSESSEES INTENTION THAT THE SAME WERE PART OF BUS INESS ACTIVITY RESULTING IN BUSINESS INCOME, IT SHOULD HAVE APPEARED AS STOC K-IN-TRADE IN THE ASSESSEES PROFIT & LOSS ACCOUNT AND BALANCE SHEET FOR THE PERIOD FROM YEAR ENDING 31.03L.2008 TO 31.03.2010. BUT THIS IS NOT THE CASE AT ALL. IT IS PRAYED THAT THE ABOVE FACTS CLEARLY BRING OUT THAT THE AUTHORITIES BELOW WERE CORRECT IN HOLDING THAT THE PROFIT ON SALE OF THE AFORESAID GALA WAS TO BE TAXED AS STCG AND NOT BUSINESS INCOME AS CLAIMED BY THE ASSESSEE. 4.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. FROM A APPRECIAT ION OF THE FACTS ON RECORD IT IS SEEN THAT DURING THE YEAR UNDER CONSID ERATION THE ASSESSEE HAS SOLD A GALA AND DECLARED THE PROFIT OF ` 22,00,716/- THEREOF AS BUSINESS INCOME. ON AN EXAMINATION OF THE PURCHASE AGREEMENT DATED 01.11.2007 THE AO OBSERVED THAT THE ASSESSEE HAD PURCHASED THE LAND ALONGWITH DEVELOPMENT RIGHTS AND WHATEVER THE NOMENCLATURE OF THE AGREEMENT, IT WAS AN OUTRIGHT PURCHASE, WHEREBY THE ASSESSEE STEP PED INTO THE SHOES OF THE OWNER. AFTER INCURRING EXPENDITURE ON IMPROVEME NT, THE ASSESSEE SOLD THE PROPERTY ON 30.12.2009 FOR ` 80 LAKHS. ON APPEAL, THIS VIEW WAS UPHELD BY THE LEARNED CIT(A). 4.3.2 ON A CONSIDERATION OF THE FACTS OF THE MATTER AS BROUGHT OUT BY BOTH PARTIES, IT APPEARS TO US THAT THOUGH THE NOMENCLAT URE OF THE AGREEMENT DATED 01.11.2007 IS GIVEN AS DEVELOPMENT AGREEMENT, A PERUSAL OF THE VARIOUS RECITALS IN THE AGREEMENT INDICATE THAT APA RT FROM ACQUIRING ALL DEVELOPMENT RIGHTS, THE ASSESSEE IS THE DE FACTO OW NER OF THE PROPERTY AS HE HAS THE ABSOLUTE RIGHTS OF POSSESSION, DEVELOPIN G, SELLING, RECEIVING SALE PROCEEDS, ETC. TO THE TOTAL EXCLUSION OF THE ERSTWH ILE OWNER. THIS VIEW OF ITA NO. 7235/MUM/2014 SHRI VIPIN P. MEHTA 5 OURS IS FURTHER CONFIRMED AS PERUSAL OF THE SALE AG REEMENT OF THE SAID PROPERTY, I.E. GALA DATED 30.12.2009 (COPY PLACED A T PG. 2 TO 20 OF THE PAPER BOOK) WOULD SHOW THAT ON THE LAST PAGE, PAGE 11 (PG . 14 OF THE PAPER BOOK), THE ASSESSEE HAS SIGNED, SEALED AND DELIVERED THE P ROPERTY IN HIS ACTUAL CAPACITY AS OWNER OF THE PROPERTY. IF THE OWNERSH IP STILL VESTED IN THE ERSTWHILE OWNERS, AS CLAIMED BY THE ASSESSEE, THEN THEY SHOULD HAVE BEEN AT LEAST CONSENTING PARTIES TO THE SALE DEED DATED 30.12.2009. THESE DOCUMENTARY EVIDENCES, IN OUR VIEW, PUTS PAID TO TH E ASSESSEES CLAIM ON FACTS THAT THE INCOME/PROFIT ARISING ON SALE OF THE GALA WAS HIS BUSINESS INCOME. IN OUR VIEW, THE INCOME FROM SALE OF GALA H AS BEEN CORRECTLY HELD BY THE AUTHORITIES BELOW TO BE EXIGIBLE TO TAX AS S TCG AND NOT BUSINESS INCOME. WITH DUE RESPECT, THE JUDICIAL PRONOUNCEMEN TS CITED BY THE ASSESSEE DO NOT COME TO HIS RESCUE AS THEY ARE FACT UALLY DIFFERENT AND DISTINGUISHABLE FROM THE FACTUAL SITUATION IN THE C ASE ON HAND. IN THIS FACTUAL AND LEGAL MATRIX OF THE CASE, WE FIND NO ME RIT IN THIS GROUND NO. 1 RAISED BY THE ASSESSEE AND CONSEQUENTLY DISMISS THE SAME. 5. GROUND NO. 2 APPLICABILITY OF THE PROVISIONS OF S ECTION 50C OF THE ACT 5.1 IN VIEW OF OUR DECISION (SUPRA), HOLDING THAT T HE ASSESSEES PROFIT ON SALE OF THE GALA VIDE AGREEMENT DATED 30.12.2009 IS TO BE ASSESSED AS STCG AND NOT BUSINESS INCOME (SUPRA), THE PROVISION S OF SECTION 50C ARE TO BE INVOKED AND HAVE BEEN RIGHTLY INVOKED IN THIS CASE BY THE AUTHORITIES BELOW. SINCE THE SALE CONSIDERATION STA TED IN THE SALE AGREEMENT DATED 30.12.2009 FOR SALE OF GALA AT ` 80 LAKHS, WAS LOWER THAN THE VALUATION SHOWN FOR STAMP DUTY PAPERS BY THE ST AMP VALIDATION AUTHORITIES AT ` 1,02,20,000/-, THE PROVISIONS OF SECTION 50C HAVE B EEN CORRECTLY INVOKED FOR TAKING THE SALE VALUE OF LAND AT RS.1,02,20,000/- WHILE COMPUTING THE STCG. CONSEQUENTLY, GROUND NO. 2 OF THE ASSESSEES APPEAL IS DISMISSED. 6. GROUND NOS 3 & 4 COST OF IMPROVEMENT 6.1 THE CLAIM OF THE ASSESSEE IS THAT THE EXPENDITU RE INCURRED ON COST OF CONSTRUCTION/IMPROVEMENT WAS TOTALLY ` 57,99,284/- INCLUDING UNDER OTHER HEADS. ON EXAMINATION THEREOF, THE AO CALLED FOR IN FORMATION UNDER ITA NO. 7235/MUM/2014 SHRI VIPIN P. MEHTA 6 SECTION 133(6) OF THE ACT IN ORDER TO VERIFY THE EX PENDITURE FROM FOLLOWING FOUR PARTIES: - (I) ADINATH STEEL CORPORATION ` 4,58,640 / - (II) SHRINATH CORPORATION ` 2,72,456 / - (III) ASIF PATEL ` 1,22,950/ - (IV) SHREE RAM TRADING ` 10,350 / - (V) N.J. LALA ` 22,00,000 /- TOTAL ` `` ` 30,64,396 / // /- -- - SINCE THE NOTICE SENT TO THESE PARTIES RETURNED UNS ERVED, THE AO REQUIRED THE ASSESSEE TO PRODUCE THESE PARTIES BEFORE HIM FO R VERIFICATION. AS THE ASSESSEE NEITHER PRODUCED THE PARTIES BEFORE THE AO FOR VERIFICATION, NOR FILED ACCOUNT/BALANCES CONFIRMATIONS FROM THEM, THE AO HELD THESE EXPENSES TO BE NOT GENUINE AND REDUCED THE COST OF IMPROVEMENT AND CONSTRUCTION TO THAT EXTENT. ON APPEAL, THE LEARNED CIT(A) UPHELD THE AOS VIEW IN THE MATTER. 6.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ACCORDING TO THE LEARNED A.R. OF THE ASSESSEE, EVEN THOUGH THE AFORESAID FOUR PARTIES DI D NOT RESPOND TO NOTICES UNDER SECTION 133(6) OF THE ACT OR FILE CONFIRMATIO N BEFORE THE AO, THE ASSESSEE FILED THE DETAILS OF ADDITIONS/COST OF IMP ROVEMENT EXPENSES ALONGWITH SUPPORTING BILLS IN RESPECT OF THE GALA B EFORE THE AO AND THEREFORE THE CLAIM OUGHT TO BE ALLOWED. FROM AN AP PRECIATION OF THE FACTS OF THE MATTER ON RECORD, IT IS SEEN THAT THE LEARNE D CIT(A) HAS IN FACT TAKEN DUE NOTE OF THE ASSESSEES SUBMISSIONS IN THIS REGA RD AT PAGES 11 TO 13 OF THE IMPUGNED ORDER AND TAKEN NOTE THEREOF WHILE DIS MISSING THE ASSESSEES CLAIM OF EXPENDITURE INCURRED ON COST OF IMPROVEMEN T IN RESPECT OF THE AFORESAID FOUR PARTIES (SUPRA) AMOUNTING TO ` 30,64,396/-. EXCEPT FOR RAISING THESE GENERAL ARGUMENTS BEFORE US, THE ASSE SSEE HAD NOT PLACED ON RECORD ANY MATERIAL EVIDENCE WHICH CONTROVERTS ANY OF THE FINDINGS OF THE AUTHORITIES BELOW ON THIS ISSUE. IN THIS FACTUAL MA TRIX OF THE CASE, WE UPHOLD THE ACTION OF THE AUTHORITIES BELOW IN DISAL LOWING THE ASSESSEES CLAIM FOR HAVING INCURRED EXPENDITURE OF ` 30,64,396/- AS COST OF IMPROVEMENT IN RESPECT OF THE AFORESAID FOUR PARTIE S. CONSEQUENTLY GROUNDS 3 AND 4 OF THE ASSESSEES APPEAL ARE DISMIS SED. ITA NO. 7235/MUM/2014 SHRI VIPIN P. MEHTA 7 7. GROUND NO. 5 DISALLOWANCE OUT OF WAGES @10% 7.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ACCORDING TO THE ASSESSEE THIS DISALLOWANCE OF ` 38,334/- WAS NOT CALLED FOR SINCE THE EMPLOYEES HAV E BEEN PAID THEIR WAGES AS PER THE RECORD MAINTAINED WHICH HAVE BEEN FILED BEFORE THE AUTHORITIES BELOW. AS PER THE RECORD, IT IS SEEN THAT THE AO OBSERVED THAT INSPITE OF BEING CALLED UPON TO FURNI SH COMPLETE DETAILS OF EXPENDITURE INCURRED ON WAGES ALONGWITH SUPPORTING EVIDENCES, THE ASSESSEE FAILED TO DO SO AND THEREFORE 10% DISALLOW ANCE OF WAGES AMOUNTING TO ` 38,344/- WAS MADE. ON APPEAL, THE LEARNED CIT(A) UP HELD THE SAID DISALLOWANCE OF 10% OF WAGES EXPENDITURE A S HE FOUND THE EXPLANATION PUT FORTH BY THE ASSESSEE TO BE UNSATIS FACTORY. BEFORE US, EXCEPT FOR RAISING THIS GROUND, THE ASSESSEE HAS NO T BEEN ABLE TO BRING ON RECORD ANY MATERIAL TO CONTROVERT THE FINDINGS OF T HE AUTHORITIES BELOW. IN THIS FACTUAL MATRIX OF THE CASE, WE UPHOLD THE DISA LLOWANCE OF ` 38,344/- BEING 10% OF EXPENDITURE INCURRED ON WAGES. CONSEQU ENTLY, GROUND NO. 5 OF THE ASSESSEES APPEAL IS DISMISSED. 8. GROUND NO. 6 DISALLOWANCE OF INTEREST EXPENDITURE 8.1 IN THIS GROUND, THE ASSESSEE CHALLENGES THE ACT ION OF THE LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF ` 1,05,628/- BEING INTEREST PAID IN EXCESS OF 12% FOR LOANS TAKEN FOR HIS BUSINESS WITH OUT CONSIDERING THE FACT THAT THE SAME WAS THE PREVAILING MARKET RATE OF INT EREST DURING THAT PERIOD. AFTER HEARING BOTH PARTIES AND CAREFULLY PERUSING T HE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT BOTH THE AO AND CIT (A) HAS SUMMARILY BRUSHED ASIDE THE ASSESSEES ARGUMENTS AS UNSATISFA CTORY WITHOUT ASSIGNING ANY COGENT REASON FOR THE SAID DISALLOWAN CE. IN THIS FACTUAL VIEW OF THE MATTER WE, IN THE INTEREST OF JUSTICE, SET A SIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND RESTORE THE MAT TER TO THE FILE OF THE LEARNED CIT(A) FOR FRESH CONSIDERATION AND ADJUDICA TION AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/ SUBMISSIONS REQUIRED AND THE AO OPPORTUNITY TO REBU T THE SAME. CONSEQUENTLY, GROUND NO. 6 OF ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 7235/MUM/2014 SHRI VIPIN P. MEHTA 8 9. GROUND NO. 7 9.1 IN THIS GROUND THE ASSESSEE CONTENDS THAT HE HA D PUT FORTH AN ADDITIONAL GROUND BEFORE THE LEARNED CIT(A) WHICH W AS NOT CONSIDERED. IN THIS ADDITIONAL GROUND, IT WAS CONTENDED THAT THE A O, WHILE PASSING THE ORDER OF ASSESSMENT TREATING THE PROFIT ON SALE OF GALA AS STCG INSTEAD OF BUSINESS INCOME OF ` 22,00,716/- AS CLAIMED BY THE ASSESSEE, ERRED IN N OT REDUCING THIS AMOUNT OF ` 22,00,716/- FROM BUSINESS INCOME WHILE COMPUTING THE ASSESSEES TOTAL INCOME; THEREBY LEAD ING TO THE SAME INCOME BEING TAXED WRONGLY UNDER THE HEAD CAPITAL GAINS. A FTER HEARING BOTH PARTIES WE DIRECT THE LEARNED CIT(A) TO ADMIT THIS GROUND AND VERIFY THE ASSESSEES FACTUAL CLAIM IN THIS REGARD WITH THE AS SISTANCE OF THE AO, FOR WHICH ONLY A VERIFICATION OF THE COMPUTATION OF INC OME IS REQUIRED. CONSEQUENTLY, GROUND NO. 7 OF ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2010- 11 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER, 2016. SD/ - SD/ - (AMARJIT SINGH) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18 TH NOVEMBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -34, MUMBAI 4. THE CIT - 24, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.