The Sabarkantha Dist.Co.Op.Purchase and Sales Union Ltd., Sabarkantha V. The Dy.CIT., S.K. Circle, Himatnagar

ITA 855/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63103 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: A C SHAH
• Keywords: Business income; Tangible material; Difference of opinion; Change of opinion
• Section: 143(3); 56

Judgement Text

ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 855 & 856 /AHD/2012 (ASSESSMENT YEAR: 2 006-07 AND 2007-08) THE SABARKANTHA DISTRICT CO-OPERATIVE PURCHASE & SALES UNION LTD., HIMATNAGAR, DIST. BANASKANTHA. (APPELLANT) VS. THE DEPUTY COMMISSIONER OF INCOME TAX, SABARKANTHA CIRCLE, HIMATNAGAR. (RESPONDENT) PAN: AAAAT 0524H APPELLANT BY : SHRI A.C. SHAH RESPONDENT BY : SHRI B. L. YADAV, SR. D.R. ( )/ ORDER DATE OF HEARING : 14- 09- 2012 DATE OF PRONOUNCEMENT : 30-11-2012 PER: SHRI ANIL CHATURVEDI, A.M. SINCE THE ISSUE INVOLVED IN ITA NO. 855 & 856/AHD/ 2012 ARE INTER- CONNECTED BOTH THE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 2 2 ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF AGRICULTURAL EQUIPMENTS, SEEDS , FERTILIZERS, PESTICIDES ETC. IN THIS CASE ASSESSMENT PROCEEDINGS WERE COMPL ETED U/S. 143(3) AND THE TOTAL INCOME WAS COMPUTED AT RS.33,81,702/-. 3. THEREAFTER, ON VERIFICATION OF RECORDS, THE A.O. NOTICED THAT THE BROUGHT FORWARD BUSINESS LOSS OF RS.44,67,638/- WAS ADJUSTED AGAINST THE INCOME FROM SALE OF SHOPS. THE A.O. WAS OF THE VIEW THAT SINCE THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PURCHASE AN D SALE OF AGRICULTURAL EQUIPMENTS, SEEDS ETC., THE INCOME EARNED ON SALE O F SHOPS WAS NOT TAXABLE AS BUSINESS INCOME BUT WAS TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES AND THEREFORE THE BROUGHT FORWARD BU SINESS LOSS CANNOT BE ADJUSTED AGAINST THE INCOME ON SALE OF SHOPS. HE AC CORDINGLY CONCLUDED THAT THE SET OFF OF BUSINESS LOSS OF RS.44,67,638/- AGAINST INCOME FROM OTHER SOURCES WAS WRONG AND THEREFORE INCOME TO THA T EXTENT HAS ESCAPED ASSESSMENT AND HENCE NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 9-2-2009 AND SERVED ON ASSESSEE ON 10-2-2009. IN RESPONSE TO THE NOTICE U/S. 148, ASSESSEE FILED RETURN OF INCOME ON 22-5-2009 SHOWIN G TOTAL INCOME OF RS. 33,81,702/-. 4. ASSESSEE WAS ASKED TO EXPLAIN WHY INCOME OF RS.9 7,19,877/- ON SALE OF SHOPS SHOULD NOT BE TREATED AS INCOME FROM OTHER SOURCES U/S. 56(1) AS THE SALE OF SHOPS WAS NOT ASSESSEES BUSIN ESS AND ACCORDINGLY THE BUSINESS LOSS OF EARLIER YEARS AMOUNTING TO RS. 44,67,638/- CANNOT BE SET OFF AGAINST THE INCOME FROM SALE OF SHOPS. ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 3 5. ASSESSEE INTER-ALIA SUBMITTED THAT ASSESSEE HAD OFFICE WITH OPEN LAND AT VIJAYNAGAR. THE SAID OFFICE WAS DEMOLISHED AND T HE COMMERCIAL COMPLEX WAS DEVELOPED. SIMILARLY IT HAD A GODOWN WITH OPEN LAND AT BHILODA. THE GODOWN WAS DEMOLISHED AND SHOPPING COMPLEX WAS DEVE LOPED. ASSESSEE STARTED THE BUSINESS OF DEVELOPER AND ORGANIZER DUR ING A.Y. 2006-07 AND IT DEVELOPED SHOPPING COMPLEX DURING A.Y. 2006-07 AT V IJAYNAGAR AND THE SHOPPING COMPLEX AT BHILODA WAS DEVELOPED DURING A. Y. 2007-08. IT WAS FURTHER SUBMITTED THAT THE VENTURE UNDERTAKEN BY TH E ASSESSEE FOR THE DEVELOPMENT OF THE PLOT AT VIJAYNAGAR BY CONSTRUCTI NG SHOPPING COMPLEX WAS BUSINESS SINCE IT WAS CARRIED ON WITH A VIEW TO EARN PROFIT. IT WAS FURTHER SUBMITTED THAT IN THE PRESENT CASE, THE PRO FIT ON SALE OF SHOPS AT VIJAYNAGAR IS TREATED AS BUSINESS PROFIT AND THEREF ORE THE QUESTION OF TREATING THE SAME AS INCOME FROM OTHER SOURCES DOES ARISE. THE INCOME FROM SALE OF SHOPS WERE REFLECTED AS PROFIT IN THE RETURN OF INCOME AND WAS SET OFF AGAINST THE CARRIED FORWARD BUSINESS LOSS T O THE EXTENT OF AVAILABLE LOSS AND THIS FACT WAS CONSIDERED BY A.O. WHILE FIN ALIZING THE ASSESSMENT FOR A.Y. 2006-07 AND THEREFORE THE VIEW TAKEN BY A. O. FOR REOPENING ASSESSMENT AMOUNTS TO CHANGE OF OPINION WHICH WAS N OT PERMISSIBLE AND THEREFORE THE ASSESSMENT WAS BAD IN LAW. 6. THE A.O. DID NOT ACCEPT THE CONTENTIONS OF THE A SSESSEE FOR THE REASON THAT THE AUDITOR IN ITS REPORT DATED 30-6-20 06 WITH RESPECT TO THE BUSINESS OF THE ASSESSEE HAS STATED PURCHASE AND SALE OF AGRICULTURAL IMPLEMENTS, SEEDS, FERTILIZERS, PESTICIDES FOR MEMB ERS ETC. TRADING AND PROCESSING OF AGRICULTURAL AND NON-AGRICULTURAL ITE MS FOR MEMBERS AND OTHERS. ALSO RENDERS BANK FACILITIES TO ITS MEMBERS . THUS ACCORDING TO A.O. ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 4 NOWHERE IT WAS MENTIONED THAT THE SOCIETY HAS ENGAG ED ITSELF IN THE BUSINESS OF REAL ESTATE BY DEVELOPING SHOPPING COMP LEX AT VIJAYNAGAR. ACCORDING TO A.O. SINCE CONSTRUCTION IS ALSO NOT TH E ASSESSEES REGULAR BUSINESS ACTIVITY AND THEREFORE THE CLAIM OF ASSESS EE THAT INCOME FROM SALE OF SHOPS IS TO BE TREATED AS BUSINESS PROFIT WAS NO T ACCEPTABLE AND THEREFORE THE INCOME HAS TO BE TREATED AS INCOME FR OM OTHER SOURCES. THE A.O. ACCORDINGLY TREATED INCOME FROM SALE OF SHOPS AS INCOME FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME AND CONSEQUEN TLY IN VIEW OF THE PROVISIONS OF SEC. 72 (2) DID NOT ALLOW THE SET OFF OF BROUGHT FORWARD LOSS OF RS.44,67,638/- AGAINST THE INCOME FROM OTHER SOURCE S. THUS VIDE ORDER DATED 7-9-2009 PASSED U/S. 143(3) R.W.S. 147,THE TO TAL INCOME WAS DETERMINED AT RS.78,49,340/-. 7. AGGRIEVED WITH THE ORDER OF A.O., ASSESSEE CARRI ED THE MATTER BEFORE CIT (A) AND CHALLENGED THE REOPENING U/S. 147 AND D ETERMINATION OF INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSES SEE MADE DETAILED WRITTEN SUBMISSIONS BEFORE CIT (A). CIT (A) UPHELD THE ORDER OF A.O. BY HOLDING AS UNDER: IN MY CONSIDERED OPINION THOUGH THE ASSESSMENT WAS FINALIZED BY THE A.O. BUT LATER ON IT HAS COME TO THE KNOWLEDGE OF THE A.O. THAT APPELLANT IS NOT IN THE BUSINESS OF CONSTRUCTION BU SINESS. THE A.O. WAS WELL WITHIN HIS RIGHT IN REOPENING THE ASSESSME NT ON THE GROUND THAT THE CLAIM OF THE ASSESSEE THAT INCOME OF RS.97 ,19,877/- FROM SALE OF SHOPS IS TO BE TREATED AS BUSINESS PROFIT O NLY IS NOT ACCEPTABLE IN VIEW OF THOSE FACTS AS CONSTRUCTION IS NOT ASSES SEES REGULAR BUSINESS ACTIVITY. THE CLAIM OF THE APPELLANT WAS I NCORRECT IN VIEW OF LEGAL POSITION LAID DOWN BY THE SECTION 56 OF THE I . T. ACT, 1961. HENCE, THE SAME CANNOT BE HELD TO BE MERE CHANGE OF OPINION AS CONTENDED BY THE LD. A.R. THE LEGAL ISSUE AS DISCUS SED WAS NEVER ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 5 THE SUBJECT MATTER OF THE ORIGINAL ASSESSMENT AND W AS NEITHER CONSIDERED NOR DISCUSSED IN THE ORIGINAL ASSESSMENT ORDER. IN THE APPELLANTS CASE THE A.O. HAS THE TANGIBLE MATERIA L TO COME TO THE CONCLUSION THAT APEX COURT IN THE CASE OF CIT VS. K ELVINATOR OF INDIA LTD. 320 ITR 561 IS NOT APPLICABLE IN THE INSTANT C ASE. FURTHER, THE CONDITION AS SET OUT IN SECTION 148 FOR ISSUANCE OF NOTICE HAS ALSO BEEN COMPLIED WITH. THE NOTICE HAS ALSO BEEN ISSUED WITHIN THE PRESCRIBED TIME. THEREFORE, I UPHOLD THE VALIDITY O F REOPENING OF THE ASSESSMENT U/S. 147 AND NOTICE U/S. 148 OF THE ACT. THESE GROUNDS OF APPEAL CHALLENGING THE VALIDITY OF THE REASSESSMENT ARE THUS DISMISSED . 8.2 THE A.O. HAS CATEGORICALLY NOTED THAT MAIN ISSU E INVOLVED IN THIS CASE IS NATURE OF BUSINESS OF THE ASSESSEE. TH E SAME IS MENTIONED IN COL NO.8 (A) AT AUDITORS REPORT IN FO RM NO.3 (1) DATED 30-6-2006 AS UNDER: PURCHASE AND SALE OF AGRICULTURE IMPLEMENTS, SEEDS , FERTILIZER, PESTICIDES FOR MEMBERS ETC. TRADING AND PROCESSING IN AGRICULTURAL AND NON-AGRICULTURAL ITEMS FOR MEMBERS AND OTHERS. ALSO RENDERS THE SAVING BANK FACILITIES TO ITS MEMBERS. IT IS ARGUED BY THE APPELLANT THAT THE VENTURE UND ERTAKEN BY THE ASSESSEE FOR THE DEVELOPMENT OF THE PLOT AT VIJAYNA GAR BY CONSTRUCTING SHOPPING COMPLEX IS A BUSINESS SINCE I T WAS CARRIED ON WITH A VIEW TO EARN PROFIT AND THAT THE ASSESSEE HA S IN FACT EARNED THE PROFIT. IN NO CIRCUMSTANCES THE PROFIT ON SALES OF SHOPS AT VIJAYNAGAR CAN BE TREATED AS INCOME FROM OTHER SOURCES. THE DE VELOPMENT OF COMMERCIAL COMPLEX IS NOTHING BUT ADVENTURE IN THE NATURE OF TRADE. THE ARGUMENT OF THE APPELLANT IS NOT ACCEPTED AS NO WHERE IS IT MENTIONED THAT THE SOCIETY HAS ENGAGED ITSELF IN BU SINESS OF REAL ESTATE BY DEVELOPING SHOPPING COMPLEX AT VIJAYNAGAR . HENCE, CLAIM OF THE ASSESSEE THAT INCOME OF RS.97,19,877/- FROM SALE OF SHOPS IS TO BE TREATED AS BUSINESS PROFIT ONLY IS NOT ACCEPT ABLE IN VIEW OF THOSE FACTS AS CONSTRUCTION IS NOT ASSESSEES REGULAR BUS INESS ACTIVITY. HENCE,. THIS INCOME IS TAXABLE UNDER THE HEAD INCO ME FROM OTHER SOURCES ONLY U/S.56(1) OF THE I. T. ACT. ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 6 ACCORDINGLY AFTER TAKING INTO CONSIDERATION ABOVE M ATERIAL FACTS INTO CONSIDERATION AND CIRCUMSTANCES OF THE CASE, INCOME OF RS.97,19,877/- IS TREATED AS INCOME FROM THE OTHER SOURCES AND NOT AS BUSINESS INCOME AND CONSEQUENTLY SET OFF OF EARL IER YEARS LOSS OF RS. 44,67,638/- AGAINST THIS CANNOT BE ALLOWED IN V IEW OF CLEAR PROVISIONS OF SEC. 72 (1) OF THE I. T. ACT WHICH PR OVIDES THAT PROFIT AND GAINS OF BUSINESS OR PROFESSION CAN BE SET OFF AGA INST PROFITS OF ANY BUSINESS IN THE SUBSEQUENT YEARS. THE GROUND OF THE APPELLANT IS REJECTED AND THE ADDITION MADE BY THE A.O. IS CONFI RMED. 8. AGGRIEVED WITH THE ORDER OF CIT (A) THE ASSESSEE IS NOW IN APPEAL BEFORE US. 9. BEFORE US, THE LD. A.R. ON THE LEGALITY OF REOPE NING SUBMITTED THAT THE A.O. IN THE ASSESSMENT U/S.143 (3) HAD TREATED THE SALE OF SHOPS AS INCOME FROM BUSINESS. THERE WAS NO TANGIBLE MATERIAL BEFOR E A.O. TO FORM BELIEF THAT SALE OF SHOPS WAS TO BE TAXED AS INCOME FROM O THER SOURCES. THE VIEW OF A.O. THAT INCOME FROM SALE OF SHOPS IS TO BE CON SIDERED AS INCOME FROM OTHER SOURCES AND NOT BUSINESS INCOME WAS A CASE OF CHANGE OF OPINION AND THAT WAS NOT PERMISSIBLE UNDER THE PROVISIONS O F SECTION 148. THE LD. A.R., RELIED ON THE DECISION OF APEX COURT IN THE C ASE OF KELVANITOR OF INDIA LTD. (2010) 320 ITR 561 (SC). ON MERITS OF THE CASE , THE LD. A.R. SUBMITTED THAT THE ASSESSEE OBTAINED PERMISSION FRO M THE DISTRICT REGISTRAR CO-OPERATIVE SOCIETIES, HIMATNAGAR, TO CONSTRUCT CO MMERCIAL COMPLEX AND TO SALE THE SHOPS SO AS TO REDUCE THE LOSSES. THE A CTIVITY OF CONSTRUCTION WAS CARRIED OUT WITH A VIEW TO EARN PROFITS. WHEN A N ACTIVITY IS UNDERTAKEN TO EARN PROFITS, THE ACTIVITY IS IN THE NATURE OF B USINESS. THE ASSESSEE STARTED THE BUSINESS OF DEVELOPER AND ORGANIZER DUR ING A.Y. 2006-07. THE ASSESSEE DEVELOPED SHOPPING COMPLEX AT VIJAYNAGAR I N A.Y. 2006-07 ON ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 7 THE LAND OWNED BY THE ASSESSEE AND THE SHOPPING COM PLEX AT BHILODA WAS DEVELOPED DURING A.Y. 2007-08. THE PROFIT ON SALE O F SHOPS WAS REFLECTED AS BUSINESS INCOME AND THE SALE OF LAND WAS CONSIDE RED AS CAPITAL GAINS. THE ACTIVITY OF THE ASSESSEE IN CONSTRUCTING AND SE LLING OF THE SHOPS WAS ADVENTURE IN THE NATURE OF TRADE. THIS WAS ACCEPTED BY THE A.O. WHILE FINALIZING THE ASSESSMENT U/S. 143(3). IT WAS FURTH ER SUBMITTED THAT A.O. HAS PLACED RELIANCE ON THE STATEMENT IN THE AUDIT REPOR T WITH RESPECT TO THE BUSINESS OF THE ASSESSEE TO HOLD THAT THE INCOME FR OM SALE OF SHOPS IS INCOME FROM OTHER SOURCE AND NOT PROFIT FROM BUSI NESS. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF CIT VS. SUTLEJ C OTTON MILLS SUPPLY AGENCY LTD. [166 ITR 706] (SC). AND KEYARAM HOTELS PVT. LTD. V/S. ACIT (2008) 300 ITR 118 (MAD.). HE THUS URGED THAT THE I NCOME ON SALE OF SHOPS BE TREATED AS BUSINESS INCOME AND NOT INCOME FRO M OTHER SOURCES. 10. ON THE OTHER HAND THE LD. D.R. PLACED RELIANCE ON THE ORDER OF A.O. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. 12. THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSE SSEE IS A CO-OPERATIVE SOCIETY WHICH IS ENGAGED IN THE BUSINESS OF PURCHAS E, SALE OF AGRICULTURAL IMPLEMENTS, SEEDS, FERTILIZERS, TRADING AND PROCESS ING IN AGRICULTURE AND NON AGRICULTURE ITEMS ETC. THE ASSESSEE WAS HAVING OFFICE WITH OPEN LAND AT VIJAYNAGAR AND GODOWN WITH OPEN LAND AT BHILODA. AFTER OBTAINING PERMISSION FROM THE DISTRICT REGISTRAR CO-OP. SOCIE TIES, HIMATNAGAR FOR CONSTRUCTION OF COMMERCIAL COMPLEX, THE ASSESSEE ST ARTED THE ACTIVITY OF ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 8 DEVELOPER AND ORGANIZER IN A.Y. 2006-07 PURSUANT TO WHICH IT DEMOLISHED ITS OFFICE (AT VIJAYNAGAR) AND GODOWN (AT BHILODA) AND CONSTRUCTED SHOPS AND SOLD THE SHOPS. THE ACTIVITY OF THE CONSTRUCTIO N WAS STARTED BY THE ASSESSEE TO REDUCE THE ACCUMULATED LOSSES. THE ASSE SSEE DEVELOPED SHOPPING COMPLEX AT VIJAYNAGAR IN A.Y. 2006-07 AND AT BHILODA DURING A.Y. 2007-08.THE PROFIT ON SALE OF SHOPS WAS REFLECTED A S BUSINESS INCOME AND THE SALE OF SHOPS WAS CONSIDERED AS BUSINESS INCOME BY THE A.O. WHILE FRAMING ORDER U/S. 143(3). THE FACT THAT THE ASSESS EE OWNED LAND AND HAD CARRIED FORWARD LOSSES FROM, BUSINESS IS NOT DISPUT ED BY THE REVENUE. THE ASSESSEE HAD PASSED THE NECESSARY RESOLUTION IN ITS MEETING IS ALSO ON RECORD AND THE SAME IS NOT IN DISPUTE. IN THE PRESE NT CASE THE SOLE INTENTION OF THE ASSESSEE TO CONSTRUCT THE COMMERCIAL COMPLEX AND SALE THE SHOPS APPEARS TO BE WITH THE INTENTION OF ENGAGING ITSELF INTO A COMMERCIAL ACTIVITY AND IN THE NATURE OF BUSINESS. THE INTENTION OF THE ASSESSEE TO CONSTRUCT AND SELL THE SHOPS WITH A VIEW TO EARN PROFITS HAS NOT BEEN DOUBTED BY THE REVENUE. THE ASSESSEE HAD CONSTRUCTED COMMERCIAL CO MPLEX AND CONSTRUCTED SHOPS. WHILE FRAMING THE ORIGINAL ASSES SMENT U/S. 143(3) ON 28-9-2007, THE INCOME FROM SALE OF SHOPS WAS CONSID ERED AS BUSINESS INCOME. THESE FACTS HAVE NOT BEEN CONTROVERTED BY T HE REVENUE BY BRINGING ANY CONTRARY MATERIAL ON RECORD. THE DISPU TE THEREFORE IN THE PRESENT CASE IS WHETHER THE INCOME EARNED FROM ACTI VITY OF SALE OF SHOPS COMMENCED BY THE ASSESSEE DURING THE YEAR IS TO BE CONSIDERED AS BUSINESS INCOME OR INCOME FROM OTHER SOURCES. 13. IN THE CASE OF CIT VS. SUTLEJ COTTON MILLS LTD. (SUPRA), THE HONBLE APEX COURT HAVE HELD AS UNDER: ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 9 IT IS NOT NECESSARY TO CONSTITUTE TRADE THAT THERE SHOULD BE A SERIES OF TRANSACTIONS BOTH OF PURCHASE AND OF SALE. A SINGLE TRANSACTION OF PURCHASE AND SALE OUTSIDE THE ASSESSEES LINE OF BU SINESS MAY CONSTITUTE AN ADVENTURE OF TRADE. NEITHER REPETITIO N NOR CONTINUITY OF SIMILAR TRANSACTION IS NECESSARY TO CONSTITUTE A TR ANSACTION AS ADVENTURE IN THE NATURE OF TRADE. IF THERE IS REPET ITION AND CONTINUITY, THE ASSESSEE WOULD BE CARRYING ON A BUSINESS AND TH E QUESTION WHETHER THE ACTIVITY IS AN ADVENTURE IN THE NATURE OF TRADE CAN HARDLY ARISE. 14. SEEN IN THE LIGHT OF THE HONBLE APEX COURT DEC ISION AND FACTS AND IN CIRCUMSTANCES OF THE CASE, IN THE PRESENT CASE IT I S NOT THE CASE WHERE THE LAND HAS BEEN PURCHASED AND HAS BEEN SOLD AT A LATE R DATE. IN THE PRESENT CASE THE LAND HAS BEEN PURCHASED AND DUE TO THE REA SON TO ACCUMULATED LOSSES THE SOCIETY HAD TAKEN A CONSCIOUS TO ENTER I NTO THE BUSINESS OF DEVELOPER AND ORGANIZER. THE ASSESSEE HAD ALSO OBTA INED PERMISSION FROM THE DY. REGISTRAR OF CO-OP. SOCIETIES FOR CONSTRUCT ION AND SALE OF SHOPS. IT ACCORDINGLY DEMOLISHED THE OFFICE AND GODOWN AND CO NSTRUCTED THE SHOPPING COMPLEX AND SHOPS WITH THE INTENTION TO MA KE PROFITS ON ITS SALE. THE ACTIVITY OF CONSTRUCTION AND SALE CONTINUED IN TWO ASSESSMENT YEARS AND THE INCOME FROM SALE OF SHOPS WAS CONSIDERED AS INCOME FROM BUSINESS BY THE ASSESSEE. CONSIDERING THE AFORESAID FACTS THE INTENTION OF THE ASSESSEE TO DO THE BUSINESS OF CONSTRUCTION CAN NOT BE DOUBTED. IN VIEW OF THE TOTALITY OF THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE INCOME FROM SALE OF SHOPS HAS TO BE TREATED AS BUSINESS INCOME AND NOT AS INCOME FROM OTHER SOURCES. THE APPEAL OF THE ASSESSEE IS A LLOWED. ITA NO.856/AHD/2012. ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 10 15. BOTH THE PARTIES HAVE SUBMITTED THAT THE FACTS AND THE ISSUE IN THE PRESENT APPEAL ARE SIMILAR TO THOSE OF ITA NO.855/A HD/2012 AND THEREFORE HAVE SAME SUBMISSIONS. SINCE SIMILAR GROUND HAS AL READY BEEN DECIDED BY US IN ITA NO.855/AHD/2012 IN FAVOUR OF ASSESSEE, THE FINDINGS GIVEN IN THE AFORESAID ORDER THEREFORE APPLIES TO THE ISSUE UNDER PRESENT APPEAL THUS FOR SIMILAR REASONS AND OBSERVATIONS, THE APPE AL OF THE ASSESSEE IS ALLOWED. 16. IN THE RESULT, THE APPEALS OF ASSESSEE FOR BOTH THE YEARS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30- 11- 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD ITA NO. 855 & 856/AHD/2012 . ASSESSMENT Y EAR 2006-07 & 07- 08 . 11 1.DATE OF DICTATION 21 - 9 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 5 / 11/ 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER