The ITO, Ward-4(1), Ahmedabad V. Gobind Real Estate Developers Pvt.Ltd., Ahmedabad

ITA 766/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85513 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: S N DIVATIA
• Keywords: Business income; Tax effect

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV , JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO. 766 /AHD/ 201 3 [ [ / ASSESSMENT YEAR: 2009 - 10 THE INCOME - TAX OFFICER, WARD - 4(1), AHMEDABAD VS GOBIND REAL ESTATE DEVELOPERS PVT LTD, 30, GOLDEN HOME, NR. GURUDWARA, THALTEJ, AHMEDABAD PAN : AACCG 3160 G / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI DINESH SINGH, SR. DR. ASSESSEE(S) BY : SHRI S.N. DIVATIA, AR / DATE OF HEARING : 09 / 01 /201 5 / DATE OF PRONOUNCEMENT: 16 / 01 /201 5 / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - VIII, AHMEDABAD DATED 28 .12.201 2 FOR ASSESSMENT YEAR 2009 - 10, BY TAKING THE FOLLOWING GROUND OF APPEAL . THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE A.O. TO TREAT PROFIT FROM SALE OF SH O P/OFFICES AS SHORT TERM CAPITAL GAIN INSTEAD OF BUSINESS INCOME WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS OF TRADING IN IMMOVABLE PROPERTY, PURCHASE OF PROPERTY AND GIVEN ON RENT . FURTHER, THE RELIANCE ON BOARDS CIRCULAR NO.4 DTD. 15.06.2007 & INSTRUCTION NO.1827 DTD 31.08.1989 WAS NOT RELEVANT TO THE FACTS OF THE CASE. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABL E ON RECORD. IN THE INSTANT ITA NO. 766 /AHD/20 1 3 ITO VS. GOBIND REAL ESTATE DEVELOPERS PVT LTD - AY 2009 - 10 - 2 - CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE - COMPANY HAS SOLD THE FOLLOWING PROPERTIES DURING THE YEAR UNDER CONSIDERATION: - SR. NO. DESCRIPTION OF PROPERTY SOLD ON SALE VALUE PURCHASED ON COST 1 OFFICE NOS.9, 10 & 11 OF SATYA COMPLEX 15.09.2008 64,80,000 17.03.2006 27,37,660 2 SHOP NO.132 OF SUNRISE MALL 20.09.2008 20,00,000 31.03.2005 21,51,200 3 SHOP NOS. 18 & 19 OF SUNRISE MALL 21.07.2008 59,00,000 20.05.2005 31,92,500 1,43,80,000 80,81,360 3. ACCORDING TO THE ASSESSING OFFICER, THE ABOVE TRANSACTIONS CONSTITUTED BUSINESS IN THE HANDS OF THE ASSESSEE AND THEREFORE, HE ASSESSED PROFIT OF RS.62,98, 640/ - UNDER THE HEAD BUSINESS INCOME. 4. ON APPEAL, THE CIT(A) HELD THAT THE AFORESAID INCOME IS ASSESSABL E UNDER THE HEAD SHORT TERM CAPITAL GAIN. 5. BEING AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 6. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) OUGHT TO HAVE HELD THAT THE AFORESAID INCOME OF RS.62,9 8,640/ - IS ASSESSABLE UNDER THE HEAD BUSINESS INCOME. 7. IN VIEW OF THIS, THE BENCH ASKED THE DEPARTMENTAL REPRESENTATIVE THAT AS THE RATE OF TAX OF BUSINESS INCOME AND SHORT TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTY ARE SAME, THEN WHAT IS THE ACT UAL GRIEVANCE OF THE REVENUE AS THERE IS NO TAX EFFECT INVOLVED IN THIS APPEAL OF THE REVENUE. IN REPLY, THE DEPARTMENTAL REPRESENTATIVE ONLY CONTENDED THAT IN FUTURE THERE MAY BE SALE OF PROPERTIES WHICH HAVE BEEN SOLD AFTER HOLDING FOR A PERIOD OF MORE ITA NO. 766 /AHD/20 1 3 ITO VS. GOBIND REAL ESTATE DEVELOPERS PVT LTD - AY 2009 - 10 - 3 - T HAN 3 YEARS AND THE ASSESSEE MAY CLAIM THE SAME AS LONG TERM CAPITAL GAIN. 8. WE DO NOT FIND ANY FORCE IN THIS SUBMISSION OF THE DEPARTMENTAL REPRESENTATIVE. IT IS AN ESTABLISHED POSITION THAT A DEALER IN A COMMODITY MAY ALSO BE AN INVESTOR IN THE SIMILAR PROPERTY. FOR EXAMPLE, A PERSON MAY PURCHASE CERTAIN SHARES FOR TRADING AS STOCK IN TRADE AND ALSO MAY ACQUIRE CERTAIN SHARES FOR INVESTMENT. THEREFORE, MERELY FROM HOLDING THAT PROFIT ON SHARES WHICH WERE HELD BY IT AS INVESTMENT RESULTED IN INCOME ASSE SSABLE UNDER THE HEAD CAPITAL GAIN DO NOT IMPLY THAT PROFIT ON SALE OF SHARES WHICH HAVE BEEN HELD AS STOCK IN TRADE WILL ALSO BE ASSESSED AS CAPITAL GAIN. WE FIND THAT THE DEPARTMENTAL REPRESENTATIVE COULD NOT DEMONSTRATE THAT ANY TAX EFFECT WAS INVOLVED IN THIS APPEAL OF THE REVENUE. THEREFORE, IN VIEW OF PROVISIONS OF SECTION 268A OF THE INCOME - TAX ACT READ WITH CBDT INSTRUCTION NO.3/2011 DATED 09.02.2011 , WHICH HAS BEEN REVISED ON 10.07.2014 BY INSTRUCTION NO.5/2014 TO RS.4 LACS, AS THE TAX EFFECT INVOL VED IN THIS REVENUES APPEAL IS LESS THAN RS.4 LACS, IN FACT NIL, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. ACCORDINGLY, THIS APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN T HE COURT ON FRIDAY , THE 16 TH OF JANUARY , 201 5 AT AHMEDABAD. SD/ - SD/ - ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 16 / 01 /201 5 * BIJU T , PS ITA NO. 766 /AHD/20 1 3 ITO VS. GOBIND REAL ESTATE DEVELOPERS PVT LTD - AY 2009 - 10 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - VIII, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD