DCIT, Jaipur V. M/S RAJNANDINI CONSTRUCTIONS P LTD., Jaipur

ITA 775/JPR/2011

• Counselvise Citation: 77523114 RSA 2011
• Duration Of Justice: 2 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-09-2011
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: B V MAHESHWARI
• Keywords: Capital asset; Business income; Depreciation; Charitable institution; Rule of consistency; Tax effect
• Section: 32; 147

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH : JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NOS. 839/JP/2012 & 775/JP/2011 (A.YS. 2007-08 & 2008-09) DCIT, CIRCLE-2, VS. M/S. RAJNANDINI JAIPUR. CONSTRUCTION PVT. LTD., C-39, LAJPAT MARG, C-SCHEME, JAIPUR. PAN NO. AAACC 9510 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.V. MAHESHWARI. DEPARTMENT BY : SHRI D.C. SHARMA - D.R. DATE OF HEARING : 28/01/2014. DATE OF PRONOUNCEMENT : 26/02/2014. O R D E R PER N.K. SAINI, A.M THESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED A GAINST SEPARATE ORDERS EACH DATED 14/08/2012 & 27/06/2012 FOR THE A .YS. 2007-08 & 2008-09 RESPECTIVELY BY THE LD. CIT(A)-I, JAIPUR. THE MAIN ISSUE INVOLVED IN THESE TWO APPEALS IS COMMON AND THE APPEALS WERE HEARD TOGETHER, SO, THESE ARE BEING DISPOSED OFF BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE. 2 2 FIRST WE WILL DEAL WITH I.T.A.NO. 839/JP/2012 FOR THE A.Y. 2007-08. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: WHETHER ON THE FACTS AND IN THE PRESENT CIRCUMSTAN CES OF THE CASE AND IN LAW THE LEARNED CIT(A) IS JUSTIFIED IN:- (I). DIRECTING TO TREAT THE RENTAL RECEIPTS OF RS. 95,55,000/- AS INCOME FROM BUSINESS IGNORING THE FINDINGS GIVEN BY THE HO N'BLE APEX COURT IN THE CASE OF M/S. SHAMBU INVESTMENT P. LTD. VS. CIT 263 ITR 143 (SC). (II). DIRECTING TO COMPUTE THE CAPITAL GAIN ONLY ON THE FLOOR AREA OF SOLD PORTION OF PROPERTY NOT ACCEPTING THE CAPITAL GAIN COMPUTED BY THE AO ON SALE OF PROPERTY OF RS. 70,75,626/- 3. VIDE GROUND NO.(I), THE GRIEVANCE OF THE DEPARTMEN T RELATES TO THE DIRECTION GIVEN TO THE ASSESSING OFFICER TO TREAT T HE RENTAL RECEIPTS OF RS. 95,55,000/- AS INCOME FROM BUSINESS. 4. FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT AS SESSEE FILED RETURN OF INCOME ON 26/10/2007 DECLARING NIL INCOME. THE SAI D RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE I.T. ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT). LATER ON, CASE WAS REOP ENED UNDER SECTION 147 OF THE ACT. THE MAIN REASON FOR REOPENING OF THE A SSESSMENT WAS THAT ASSESSEE HAD SHOWN RENTAL RECEIPTS OF RS. 95,55,000 /- FROM M/S. BANSAL CLASSES IN THE P & L ACCOUNT. THE ASSESSING OFFICE R WAS OF THE VIEW THAT THE RECEIPTS WERE REQUIRED TO BE TAKEN UNDER THE HE AD INCOME FROM HOUSE PROPERTY AND DEDUCTION UNDER SECTION 24 OF T HE ACT WAS ALLOWABLE 3 RATHER THAN THE ADMINISTRATIVE EXPENSES CLAIMED AT RS. 36,85,497/- AND DEPRECIATION OF RS. 21,17,992/-. THE ASSESSING OFF ICER OBSERVED THAT THE INCOME OF RENT FROM OWNERSHIP OF PROPERTY COULD NOT BE TAXED UNDER ANY OTHER HEAD THAN THE INCOME FROM HOUSE PROPERTY. HE FURTHER OBSERVED THAT WHERE SERVICE ELEMENT WAS PREDOMINANT WITH CON SIDERATION BEING A LUMP SUM ONE, INCOME HAD SOMETIMES BEEN TREATED AS BUSINESS INCOME, AS FOR EXAMPLE IN THE CASE OF A COLD STORAGE OR FUL LY EQUIPPED CINEMA THEATRE. HOWEVER, WHEN THE ELEMENT OF HIRE RENTAL WAS PREDOMINANT, THE ENTIRE INCOME WAS REQUIRED TO BE ASSESSED AS PR OPERTY INCOME. THE ASSESSING OFFICER GAVE FINDING THAT THE LEASED DEED STRONGLY INDICATED THAT THE ASSESSEES INTENTION WAS TO EARN INCOME FR OM THE OWNERSHIP OF THE PROPERTY AND NOT FROM ANY BUSINESS ACTIVITY. H E FURTHER OBSERVED THAT THE TENANTS IN THE BUILDING IN QUESTION HAD RE MAINED THE SAME SINCE A.Y. 2007-08 AND IN THE BOOKS OF ACCOUNTS OF THE AS SESSEE, THE BUILDING HAD BEEN SHOWN AS FIXED ASSET AND NOT AS STOCK-IN-T RADE. ACCORDING TO HIM, THE ASSESSEE WAS ENJOYING RENTAL RECEIPTS FROM LEASING OUT THIS ASSET WHICH WAS NOT MEANT FOR SELLING OF THE CONSTRUCTED PART AND THAT THE ASSESSEE WAS NOT ENGAGED IN CONSTRUCTION OF ANY OTH ER PROJECTS EITHER TO SELL OFF OR TO LEASE OUT. THE ASSESSING OFFICER TR EATED THE RECEIPTS FROM THE BUILDING AS INCOME FROM HOUSE PROPERTY AND DI SALLOWED THE 4 EXPENSES AND DEPRECIATION CLAIMED BY THE ASSESSEE. RELIANCE WAS PALED ON THE FOLLOWING CASE LAWS:- 1) SHAMBHU INVESTMENT P. LTD. VS. CIT 263 ITR 143(S C) 2) ANIKAR TRADERS AND ESTATES P. LTD. VS. CIT 186 ITR 175 (MAD) 3) OCEAN STRUCTURES P. LTD. VS. ACIT (2008) 214 CTR 338 (DEL.) 4) MANGLA HOMES P. LTD. VS. ITO & OTHERS (2008) 15 DTR 110 (BOMBAY) 5) EAST INDIA HOUSING AND LAND DEVELOPMENT TRUST LT D. VS. CIT (1961) 42 ITR 49 (SC) 6) TINSUKIA DEVELOPMENT CORPORATION LTD. VS. CIT (1 979) 120 ITR 466 (CAL) 7) CIT VS. INDIAN WAREHOUSING INDUSTRIES LTD. (2003 ) 258 ITR 93 (MAD) 8) KEYARAM HOTELS P. LTD. VS. ACIT (2008) 300 ITR 1 18 (MAD) 9) CIT VS. CHENNAI PROPERTIES & INVESTMENTS LTD. (2 004) 266 ITR 685. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND THE SUBMISSIONS MADE AS INCORPORATED IN PARA 5. 2 OF THE IMPUGNED ORDER WERE AS UNDER:- I) THE BUILDING IN QUESTION WAS A COMMERCIAL COMPL EX APPROVED BY THE JDA WHICH WAS CONSTRUCTED WITH A PRIMARY MOTIVE OF BEING THE OFFICE OF THE COMPANY AND FOR LEASING OUT THE ADDITIONAL S PACE FOR COMMERCIAL EXPLOITATION OF THE BUILDING. THE BUILD ING WAS USED FOR BUSINESS PURPOSE AFTER HAVING BEEN LET OUT TO BANSA L CLASSES AND THE ASSESSEE WAS CLAIMING DEPRECIATION ON THE SAME. II) THE DEPARTMENT HAD ACCEPTED THE APPELLATE ORDER OF THE LD. CIT(A) IN ASSESSMENT YEAR 2006-07 AS NO APPEAL HAD BEEN FILED . LOW TAX EFFECT DID NOT BAR THE DEPARTMENT FROM FILING OF APPEAL IF A LEGAL ISSUE WAS INVOLVED. TO THIS EXTENT THE MATTER WAS SETTLED IN FAVOUR OF THE ASSESSEE. 5 III) IN ASSESSMENT YEAR 2008-09 THE LD. CIT(A) HAD ONCE AGAIN DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON THE SAME FAC TS AND NO NEW ISSUE WAS BROUGHT ON RECORD BY THE AO. IV) WHEN THE COMMERCIAL COMPLEX WAS GIVEN ON LEASE WITH STATE OF THE ART FACILITY THEN THE INCOME FROM LEASING COULD NOT BE TREATED AS RENTAL INCOME. THE BUILDING WAS A PART OF THE FIXE D ASSETS OF THE BUSINESS AND HAD NOT BEEN TRANSFERRED AS STOCK IN T RADE BECAUSE IT WAS NOT MEANT FOR SALE. SINCE IT WAS TREATED AS FI XED ASSETS, THE ASSESSEE WAS CHARGING DEPRECIATION ON IT. IT WAS FURTHER REITERATED THAT THE FACT THAT THE L ESSEE WAS THE SAME AS IN PREVIOUS YEAR COULD NOT BE THE BASIS OF CONCLUSI ON THAT RENTAL RECEIPTS WERE INCOME FROM HOUSE PROPERTY. THE CRUC IAL DECIDING FACTOR WAS THAT THE BUILDING WAS BEING COMMERCIALLY EXPLOITED. THE FOLLOWING CASE LAWS RELIED ON BY THE AO WERE A LSO DISTINGUISHED ON FACTS FROM THE FACTS OF THE CASE OF THE ASSESSEE . A) SHAMBHU INVESTMENT P. LTD. VS. CIT 263 ITR 143(S C) B) ANIKAR TRADERS AND ESTATES P. LTD. VS. CIT 186 ITR 175 (MAD) C) OCEAN STRUCTURES (P) LTD. VS. ACIT 214 CTR 338 ( DEL) D) MANGLA HOMES (P) LTD. VS. ITO & OTHERS 15 DTR 11 0 (BOMBAY) E) EAST INDIA HOUSING AND LAND DEVELOPMENT TRUST LT D. VS. CIT 42 ITR 49 (SC) F) TINSUKIA DEVELOPMENT CORPORATION LTD. VS. CIT 12 0 ITR 466 (CAL) 1979 G) CIT VS. INDIAN WAREHOUSING INDUSTRIES LTD. 258 I TR 93 (MAD). H) KEYARAM HOTELS (P) LTD. VS. ACIT 300 ITR 118 (MA D) I) CIT VS. CHENNAI PROPERTIES & INVESTMENTS LTD. 26 6 ITR 686. J) CIT VS. GOEL BUILDERS ALLAHABAD H.C. 5-TAXNAB-73 (2010) 6 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE, OBSERVED THAT THE THEN CIT(A) IN ASSESSEE S CASE FOR THE A.Y. 2006-07 ON SAME FACTS HAD GIVEN A FINDING IN FAVOUR OF THE ASSESSEE VIDE HIS ORDER DATED 31/03/2010 AND SINCE THE FACTS OF T HE CASE ARE SAME AS IN 6 A.Y. 2006-07 AND THE ASSESSING OFFICER HAD NOT BROU GHT ANY EVIDENCE OR ARGUMENTS ON RECORD TO CONTROVERT THE FINDINGS OF T HE LD. CIT(A), THEREFORE, THE CASE WAS COVERED BY THE EARLIER FIND INGS OF THE THEN LD. CIT(A) FOR THE A.Y. 2006-07. THE LD. CIT(A), ACCOR DINGLY, DIRECTED THE ASSESSING OFFICER TO TREAT THE INCOME FROM LEASING OF THE PROPERTY AS BUSINESS INCOME. NOW THE DEPARTMENT IS IN APPEAL. 7 . LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT THE ASSESSEE RECEIVED RE NT FROM THE PROPERTY, THEREFORE, IT WAS INCOME FROM HOUSE PROPERTY AND NOT INCOME FROM BUSINESS. 8 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS HAVING LEASING BUSINESS INCOME AND HAD INCURRED ALL GENUINE EXPENDITURE TO THE BUSINESS. IT WAS FURTHE R SUBMITTED THAT IN THE FIRST YEAR OF THE ASSESSEE-COMPANY I.E. A.Y. 2006-0 7, PROPERTY INCOME WAS TREATED AS RENTAL INCOME WHEREAS THE ASSESSEE F ILED RETURN OF INCOME TREATING IT AS LEASING BUSINESS INCOME AND THE SAID ISSUE WAS SUBJECT TO APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS ORDER DA TED 31/03/2010 ALLOWED THE APPEAL AND DECIDED IT IN FAVOUR OF THE ASSESSEE AND THE DEPARTMENT HAD NOT FILED ANY APPEAL AGAINST THE SAI D ORDER OF THE LD. 7 CIT(A), HENCE IT WAS FINAL. THEREFORE, ON THE BASI S OF PRINCIPLE OF CONSISTENCY ALSO, THE DEPARTMENT OUGHT NOT TO HAVE FILED THE APPEAL FOR THE YEAR UNDER CONSIDERATION, PARTICULARLY WHEN, TH E ASSESSING OFFICER HIMSELF ADMITTED IN THE ASSESSMENT ORDER THAT THE P ROPERTY OF THE ASSESSEE WAS A COMMERCIAL BUILDING WHICH WAS NOT RE COGNIZED A HOUSE. IT WAS FURTHER STATED THAT THE PROPERTY WHICH IS HAVIN G COMMERCIAL, BUSINESS OR INDUSTRIAL USE, THEN IT HAS TO BE DEPRECIATED AN D THE ASSESSEE HAS CLAIMED DEPRECIATION FOR THE BUILDING WHICH WAS USE D FOR COMMERCIAL PURPOSES. IT WAS POINTED OUT THAT THE BUILDING IN QUESTION WAS NOT A SIMPLE BUILDING LIKE WAREHOUSE OR SHOP ETC. RATHER A COMPLEX WITH OTHER AMENITIES AND FACILITIES LIKE LIFTS, EXCAVATORS, TO ILETS, VENTILATION, AIR CONDITIONING, FURNITURE, SECURITY, FIRE ALARM, CONN ECTION OF LIGHT AND WATER, INTERNET & MAINTENANCE THEREOF AS SUCH IT WA S NOT A CASE OF SIMPLE LETTING IT, RATHER IT WAS THE LEASING FOR RU NNING THE BUSINESS IN WELL EQUIPPED BUILDING. THEREFORE, THE INCOME WAS TO B E ASSESSED UNDER THE HEAD BUSINESS INCOME BECAUSE IT WAS THE MAIN BUSI NESS OF THE ASSESSEE TO GIVE COMPLEX ON LEASE WITH AMENITIES. 9 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS DOING LEASING BUSINESS 8 AND IN REGULAR COURSE OF ITS BUSINESS, LEASED OUT I TS PROPERTY ALONG WITH OTHER FACILITIES LIKE LIFTS, EXCAVATORS, VENTILATIO N, AIR CONDITIONER, FURNITURE, SECURITY, FIRE ALARM, INTERNET ETC. AND MAINTENANCE THEREOF. IN THE PRECEDING YEAR, SIMILAR INCOME HAD BEEN ACCEPTE D BY THE DEPARTMENT AS BUSINESS INCOME AND NO APPEAL WAS FILED AGAINST THE ORDER DATED 31/03/2010 PASSED BY THE LD. CIT(A). AS THE FACTS FOR THE YEAR UNDER CONSIDERATION ARE SIMILAR TO THE FACTS INVOLVED IN THE PRECEDING YEAR, THEREFORE, BY KEEPING IN VIEW THE PRINCIPLE OF CONS ISTENCY, THE REVENUE HAS TO ACCEPT THE STAND OF THE ASSESSEE FOR THE YEA R UNDER CONSIDERATION. ON A SIMILAR ISSUE, THE HON'BLE SUPREME COURT IN TH E CASE OF CIT VS. J.K. CHARITABLE TRUST (2009) 308 ITR 161 HELD AS UNDER:- . BUT WHERE THE FACTS SITUATION IN ALL THE ASSES SMENT YEARS IS THE SAME, AND IF THE REVENUE HAS NOT APPEALED FR OM THE DECISION FOR AN EARLIER YEAR, ITS APPEAL FROM THE D ECISION FOR A SUCCEEDING YEAR WILL BE DISMISSED. IN THE PRESENT CASE ALSO, THE FACT SITUATION IN THE YEAR UNDER CONSIDERATION AND THE PRECEDING YEAR IS THE SAME AN D AS THE REVENUE HAD NOT APPEALED FROM THE DECISION OF THE PRECEDING YEA R, LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO TRE AT THE INCOME OF THE ASSESSEE FROM LEASING BUSINESS AS INCOME FROM BUSI NESS AND NOT AS INCOME FROM HOUSE PROPERTY. 9 SIMILARLY, THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. PRAKASH INDUSTRIES LTD.(2010) 324 ITR 391 HELD AS UNDER:- THAT IF IN RESPECT OF ASSESSMENT YEAR 1990-91 THE REVENUE HAD ACCEPTED THE ORDER OF THE COMMISSIONER (APPEALS ) THEN IT FOLLOWED THAT IN RESPECT OF THE EARLIER YEAR THE SA ME PRINCIPLE WOULD APPLY. ONCE THE REVENUE HAD ACCEPTE D THE VIEW OF THE COMMISSIONER (APPEALS) IN RESPECT OF TH E ASSESSMENT YEAR 1990-91 THEN IT WAS NOT OPEN TO THE REVENUE TO CHALLENGE THE SIMILAR FINDING AND DEVIATE FROM I TS EARLIER STAND. IN THE PRESENT CASE ALSO, SINCE THE DEPARTMENT HAS ACCEPTED THE VIEW TAKEN BY THE LD. CIT(A) FOR THE A.Y. 2006-07, WHEREIN ON IDENTICAL FACTS, THE INCOME WAS DIRECTED TO BE ASSESSED AS B USINESS INCOME AND NOT INCOME FROM HOUSE PROPERTY. WE, THEREFORE, D O NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CI T(A) AND ACCORDINGLY DO NOT SEE ANY MERIT ON THIS ISSUE IN THE APPEAL OF TH E DEPARTMENT. 10 . VIDE GROUND NO.(II), THE GRIEVANCE OF THE DEPARTM ENT RELATES TO THE COMPUTATION OF CAPITAL GAIN. 11 . FACTS RELATING TO THIS ISSUE IN BRIEF ARE THAT TH E ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAD REDUCED RS. 70,75,626/- FROM THE NET PROFIT AS PER THE P & L ACCOUNT 10 AND THIS WAS SHOWN UNDER THE HEAD INCOME. THE ASSE SSING OFFICER FURTHER OBSERVED THAT THE CHART OF THE FIXED ASSETS REVEALE D THAT UNDER THE BLOCK OF BUILDING AND CAPITAL WORK IN PROGRESS, THE A SSESSEE HAD SHOWN 7 TH FLOOR OF THE BUILDING IN POOJA TOWER AS SOLD TO M ARUTI LTD. FOR CONSIDERATION OF RS. 1,04,00,000/- AND THE CAPITAL WORK IN PROGRESS OF RS. 1,01,64,220/- WAS TRANSFERRED TO BUILDING BLO CK UNDER THE SUB-HEAD ADDITION TO THE BLOCK DURING THE YEAR. THE COST OF FLOOR WAS TAKEN AT RS. 33,24,374/- WHICH WAS THEN REDUCED FROM THE BLO CK OF BUILDING AND CLOSING WRITTEN DOWN VALUE OF THE BLOCK WAS TAKEN A T RS. 2,88,29,235/-. THE DIFFERENCE BETWEEN SALE CONSIDERATION AND THE C OST OF RS. 70,75,626/- WAS FIRST CREDITED TO THE P & L ACC OUNT AND THEN REDUCED FROM THE COMPUTATION OF INCOME. THE ASSESSING OFFI CER OBSERVED THAT SINCE THE RENTAL RECEIPTS WERE HELD TO BE INCOME FR OM HOUSE PROPERTY, THE RECEIPTS FROM SALE OF THIS PROPERTY WAS REQUIRE D TO BE TAXED AS CAPITAL GAIN. THE ASSESSING OFFICER WAS OF THE VIEW THAT I F THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CONSTRUCTION, THEN SELLI NG OF BUILDING PROPERTY SHOULD HAVE BEEN PART OF ITS STOCK IN TRADE AND NOT FIXED ASSETS. HE THEREFORE, TREATED THE INCOME OF RS. 70,75,626/- AS CAPITAL GAIN OF THE ASSESSEE. 11 12. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND THE SUBMISSIONS MADE AS INCORPORATE IN PARA 6.2 OF THE IMPUGNED ORDER READ AS UNDER:- THIS IS IN RELATION TO ASSESSING THE CAPITAL GAIN ON SALE OF BUILDING DURING THE YEAR. THE ASSESSEE SOLD PART OF THE BUI LDING AND SINCE THE ASSESSEE IS SHOWING THE BUILDING AS BLOCK OF AS SETS, THEREFORE, THE TOTAL SALE CONSIDERATION WAS REDUCED FROM THE C OST OF THE BUILDING AND THIS AS PER THE SYSTEM LAID DOWN U/S 3 2 OF THE IT ACT. SINCE THE LD. AO HAS NOT TREATED IT AS DEPRECIABLE ASSETS, THEREFORE, IT HAS SEPARATELY BEEN ASSESSED AS SHORT TERM CAPIT AL GAIN ON SALE OF BUILDING. WE HAVE GIVEN OUR REPLY STATING THE WDV AS PER SEC. 45(6) IN THE BLOCK OF ASSETS, BUT SINCE THE LD. AO ALREAD Y MADE UP HIS MIND THAT THIS IS NOT LEASING AND, THEREFORE, SHE H AS NOT TAKEN CARE ABOUT THE BLOCK OF ASSETS AND TREATED IT AS A CAPIT AL GAIN. 13. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE, OBSERVED THAT THE BUILDING HAD CONSISTEN TLY BEEN SHOWN BY THE ASSESSEE AS FIXED ASSETS ON WHICH DEPRECIATION HAD BEEN CLAIMED SINCE A.Y. 2006-07 IN ITS P & L ACCOUNT. THE LD. CIT(A) THEREFORE, DIRECTED THE ASSESSING OFFICER TO CALCULATE THE COMPONENT OF LAN D OF THE FLOOR SOLD TO M/S. MARUTI LTD. AND CALCULATE THE CAPITAL GAINS TA X ON THE SAID TRANSFER BECAUSE NO DEPRECIATION WAS ALLOWED ON THE LAND TO THE ASSESSEE. LD. CIT(A) ALSO OBSERVED THAT FOR CALCULATION OF DLC RA TES ON SUCH BUILDINGS, THE SUB-REGISTRAR HAD A FORMULA FOR DETERMINING THE COMPONENT OF LAND TO THE BUILT AREA WHEN A PORTION OF MULTIPLEX BUILDIN G IS TRANSFERRED. THE LD. CIT(A), THEREFORE, DIRECTED THE ASSESSING OFFIC ER TO CALCULATE THE 12 DEPRECIATION ALLOWABLE TO THE ASSESSEE AS PER SECTI ON 32(1)(III) OF THE ACT. NOW THE DEPARTMENT IS IN APPEAL. 14. LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF TH E ASSESSING OFFICER AND FURTHER SUBMITTED THAT SALE CONSIDERATION RECEI VED BY THE ASSESSEE IN VIEW OF TRANSFER OF 7 TH FLOOR OF POOJA TOWER WAS RIGHTLY HELD TO BE TAXABLE UNDER THE HEAD INCOME FROM CAPITAL GAINS BY THE ASSESSING OFFICER AND THE LD. CIT(A) WAS NOT JUSTIFIED IN DIR ECTING THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAIN ONLY ON THE ARE A OF LAND PORTION OF THE PROPERTY. 15. IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR T HE ASSESSEE STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT( A). 16. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSEE SOLD 7 TH FLOOR OF ITS BUILDING KNOWN AS POOJA TOWER FOR A SUM OF RS. 1,04,00,000/- AND IT S COST WAS TAKEN AT RS. 33,24,374/-. THE DIFFERENCE OF RS. 70,75,626/- WAS TREATED BY THE ASSESSING OFFICER AS CAPITAL GAIN. HOWEVER, THE LD . CIT(A) FOUND THAT THE ASSESSEE WAS SHOWING THE BUILDING AS ASSETS AND CLA IMING DEPRECIATION AND THEREFORE, THE COMPONENT OF LAND ONLY WAS TO BE TRE ATED AS CAPITAL ASSET 13 FOR THE PURPOSES OF CALCULATION OF LONG TERM CAPITA L GAIN AND AS THE ASSESSEE WAS CLAIMING THE DEPRECIATION ON THE BUILD ING, THEREFORE, INCOME ON THE SALE OF SAME WAS TO BE ASSESSED AS SH ORT TERM CAPITAL GAIN. IN OUR OPINION, THE LD. CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO RECALCULATE THE CAPITAL GAIN. WE DO NOT SEE ANY IN FIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 17. IN I.T.A.NO. 775/JP/2011 FOR THE A.Y. 2008-09, THE ONLY GROUND RAISED BY THE DEPARTMENT READS AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS. 56,10,522/- BY TREATING THE RENT RECEIPTS AS INCOME FROM HOUSE PROPERTY AS AGAINST BUSINESS INCOME SHOWN BY THE ASSESSEE. 18. THE FACTS OF THIS ISSUE ARE SIMILAR TO THE FACT S INVOLVED IN THE A.Y. 2007-08 (SUPRA) WHICH WE HAVE ALREADY ADJUDICATED I N THE FORMER PART OF THIS ORDER, THEREFORE, OUT FINDINGS GIVEN THEREIN S HALL APPLY MUTATIS- MUTANDIS FOR THIS ASSESSMENT YEAR ALSO. 19. IN THE RESULT, APPEALS OF THE DEPARTMENT ARE DI SMISSED. (ORDER PRONOUNCED IN THE COURT ON 26 TH FEBRUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26 TH FEBRUARY, 2014. 14 VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JAIPUR.