ITO, CHENNAI V. P.Palaniappan, CHENNAI

MA 13/CHNY/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2777 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: M KARUNAKARAN
• Keywords: Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , ! , ' # BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER M.P. NO. 13/MDS/2015 (IN ITA NO.1571/MDS/2014) / ASSESSMENT YEAR : 2008 -09 THE INCOME TAX OFFICER, NON-CORPORATE WARD 12(3), [ERSTWHILE ITO, WARD IX(3)], CHENNAI - 600 034. ( PETITIONER) V. SHRI P. PALANIAPPAN, NO.74, GOUDIA MUTT ROAD, ROYAPETTAH, CHENNAI - 600 014. PAN : AASPP 9457 A ( RESPONDENT) PETITIONER BY : SHRI N. MADHAVAN, JCIT RESPONDENT BY : SHRI M. KARUNAKARAN, ADVOCATE / DATE OF HEARING : 13.03.2015 / DATE OF PRONOUNCEMENT : 27.03.2015 $ / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE MISCELLANEOUS PETITION IS FILED BY THE REVENU E. THE PRAYER OF THE REVENUE IS THAT TWO GROUNDS WERE RAIS ED BY IT IN THE APPEAL, HOWEVER, ONLY ONE GROUND WAS ADJUDICATE D BY THE - - M.P. NO. 13/MDS/2015 2 TRIBUNAL. THE SECOND GROUND MENTIONED IN PARAS 3.1 TO 3.3 IN THE GROUNDS OF APPEAL HAS NOT BEEN CONSIDERED. 2. SHRI M. KARUNAKARAN, ADVOCATE, APPEARING ON BEHA LF OF THE ASSESSEE, FAIRLY SUBMITTED THAT THE SECOND ISSU E RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL HAS NOT BEEN A DJUDICATED. THE LD. COUNSEL FURTHER CONTENDED THAT THERE IS NO MERIT IN THE GROUND OF THE REVENUE AS THE COST OF ACQUISITION OF 54 PLOTS TAKEN BY THE CIT(APPEALS) IS AS PER THE FACTS OF TH E CASE. SINCE, ONLY 19 PLOTS WERE SOLD DURING THE RELEVANT PREVIOU S YEAR, THE REVENUE GENERATED FROM 19 PLOTS HAS BEEN RECKONED. 3. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH SIDES. THE SECOND GROUND R AISED BY THE REVENUE IN ITS APPEAL READS AS UNDER:- 3.1. THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSE SSING OFFICER TO BRING TO TAX ` 2,19,456/- AS PROFITS FROM BUSINESS ACTIVITY ON SALE OF PLOTS, BY ADOPTING THE COST OF ACQUISITION OF ALL THE 54 PLOTS. 3.2. THE LEARNED CIT(A) OUGHT TO HAVE NOTED THAT TH E ASSESSEE HAS SOLD ONLY A PART OF THE CONVERTED STOC K-IN- TRADE DURING THE RELEVANT PREVIOUS YEAR, I.E., OUT OF 54 - - M.P. NO. 13/MDS/2015 3 PLOTS, ONLY 19 PLOTS HAVE BEEN SOLD DURING THE RELE VANT PREVIOUS YEAR. 3.3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED T HAT THE COST OF ACQUISITION OF 19 PLOTS SOLD DURING THE RELEVANT PREVIOUS YEAR, ONLY, COULD BE RECKONED IN COMPUTING THE BUSINESS PROFITS OF THE ASSESSEE FOR THE ASSESSME NT YEAR UNDER CONSIDERATION. THE SECOND ISSUE RAISED BY THE REVENUE IN ITS APP EAL WAS WITH RESPECT TO COST OF ACQUISITION OF ALL THE 54 PLOTS, WHEREAS ONLY 19 PLOTS WERE SOLD DURING THE RELEVANT PERIOD. THE CONTENTION OF THE REVENUE IS THAT THE COST OF ACQUI SITION OF 19 PLOTS SHOULD HAVE BEEN TAKEN FOR COMPUTING THE BUSI NESS PROFITS OF THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT ALL THE 54 PLOTS WERE ACQUIRED BY THE ASSESSEE DURING THE PERIOD REL EVANT TO ASSESSMENT YEAR 2008-09. IT IS ALSO AN UNDISPUTED FACT THAT DURING THE SAME PERIOD, ONLY 19 PLOTS WERE SOLD. T HE REVENUE GENERATED FROM THE SALE OF SAID 19 PLOTS WAS SHOWN BY THE ASSESSEE IN THE INCOME STATEMENT. THE REVENUE GENE RATED FROM SALE OF REMAINING PLOTS WAS RECKONED IN THE RESPECT IVE ASSESSMENT YEARS IN WHICH THEY WERE SOLD. WE DO NO T FIND FORCE IN THE SUBMISSIONS OF THE LD. D.R. THAT ONLY COST O F ACQUISITION OF - - M.P. NO. 13/MDS/2015 4 19 PLOTS SOLD DURING THE YEAR SHOULD BE TAKEN INTO ACCOUNT FOR COMPUTING THE BUSINESS PROFITS. IN THE SUBSEQUEN T ASSESSMENT YEARS, THE ASSESSEE WOULD ONLY BE REGISTERING PROFI TS FROM SALE OF PLOTS WITHOUT CLAIMING CORRESPONDING COST OF ACQUIS ITION OF PLOTS IN THAT YEAR. THEREFORE, THERE WOULD BE NO LOSS OF REVENUE. THIS GROUND OF APPEAL OF THE REVENUE IS DEVOID OF MERIT AND IS DISMISSED ACCORDINGLY. 4. SINCE, THE MISCELLANEOUS PETITION HAS BEEN FILED BY THE REVENUE TO CONSIDER THE GROUND NOT ADJUDICATED BY T HE TRIBUNAL, THE SAME HAS NOW BEEN CONSIDERED. 5. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 27 TH OF MARCH, 2015 AT CHENNAI. SD/- SD/- ( . ) ( ) (A. MOHAN ALANKAMONY) (VIKAS AWASTHY) 2 34/ACCOUNTANT MEMBER ;44 34 /JUDICIAL MEMBER <2; /CHENNAI, =3 /DATED, THE 27 TH MARCH, 2015. KRI - - M.P. NO. 13/MDS/2015 5 >32? @AB C2 /COPY TO: 1. PETITIONER 2. @D4 E /RESPONDENT 3. >4 >4 F (B) /CIT(A) 4. >4 >4 F /CIT 5. GH4 @I /DR 6. H J /GF.