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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI N.K. PRADHAN, AM (A.Y:2008-09) Income Tax Officer, M/s Allied Mining Industries Pvt Ltd., 2(1)(1), Room No.561, 5 th Floor, 89, Ararat Building, 3 rd Floor, Aayakar Bhavan, M.K. Road, Vs. Nagindas Master Road, Fort, Mumbai-400020 Mumbai-400023 Appellant .. Respondent PAN No.AAACA3278P CO No.83/Mum/2016 (In A.Y: 2008-09) M/s Allied Mining Industries Pvt Ltd., Vs. Income Tax Officer, 89, Ararat Building, 3rd Floor, 2(1)(1), Room No.561, 5 th Floor, Nagindas Master Road, Fort, Aayakar Bhavan, M.K. Road, Mumbai-400023 Mumbai-400020 Appellant .. Respondent Revenue by .. Shri. B.S Bist, DR .. Shri. Devendra Jain, AR Assessee by Date of hearing .. 10-01-2017 .. Date of pronouncement 10-01-2017 O R D E R PER MAHAVIR SINGH, JM:
This appeal by the Revenue and Cross Objection by assessee are arising out of the order of CIT(A)-4, Mumbai, in appeal No. CIT(A)-4/IT-161/ITO. 2(1)(1)/2013-14 dated 09-09-2014. The Assessment was framed by ITO. 2(1)(1), Mumbai for the A.Y. 2008-09 vide order dated 28-10-2013 u/s 143(3) r. w. s. 263 of the Income Tax Act, 1961 (hereinafter ‘the Act’).
2. The only issue in this appeal of the Revenue is as regards to the order of CIT(A) treating the income arising from sale of TDR as business income instead of assessed by the AO as capital gains and consequential effects. For this Revenue has raised following three grounds: - “1. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in treating the income arising on sale of TDR as business income without appreciating the fact that TDR is the development potential of the land and as such is a capital asset within the meaning of Sec. 2(14) of the I.T. Act and the profits arising on the sale of the TDR are to be taxed under the head 'Capital Gain' as per Sec. 45 of the I.T. Act.
On facts and circumstances of the case and in. law, the Ld. CIT(A) erred in treating the income arising on sale of TDR as business income without appreciating the fact that the fact of the assessee's case for A.Y. 2006-07 and A.Y. 2008-09 were different. In, A.Y. 2006-07, the difference between the agreement value and market value was added u/s 68, whereas in the current year, the profits arising on the sale of TDR has been taxed under the head 'Capital Gain' and as such there is material difference in the fact of the case.
3. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in treating the income arising on sale of TDR as business income without appreciating the fact that the TDR arose from the land and the profits arising on the sale of TDR are treated as income from Capital Gain and therefore the provisions of section 50C are clearly applicable.”
3. At the outset, the learned Counsel for the assessee filed a copy of Tribunals order in A.Y. 2006-07, wherein Tribunal in vide order dated 30-09-2011 has adjudicated the identical issue and by relying on the co-ordinate Bench decision in the case of Inderlok Hotels Pvt. Ltd (122 TTJ 145), Mumbai threated the income declared by the assessee as income from business by observing in Para 2 and 3 as under: - “2. The assessee disputed the decision of the AO and submitted before the CIT(A) that the TDR was a movable property and provision of Section 50C were not applicable. He placed reliance on the decision of the Tribunal in the case of Inderlok Hotels Pvt. Ltd )122 TTJ 145). It was also submitted by him that Government of Maharashtra had classified as TDR movable property and therefore provisions of section 50C which apply only to transfer of land and building were not applicable. The CIT(A) agreed with the explanation of the assessee and held that provisions of Section 50C apply only to computation of capital gain. He, accordingly, deleted the addition made by the AO. Aggrieved by the order of CIT(A) the revenue in appeal before the Tribunal.
We have heard both the sides, perused the records and considered the matter carefully. The dispute is regarding computation of income from sale of TDR. The assessee had purchased TDR for Rs.17,14,705/- which had be sold for Rs. 25,83,360/-. The AO calculated the sale value as per the stamp duty reckoner as per which sale rate for the purpose of stamp duty was Rs.16,000 per sq. m. He, thus computed the value at Rs. 48Lakhs and difference of Rs. 22,16,640/- was treated as unaccounted income which was assessed/s.
The assessment order shows that the said amount has been assessed under the head ‘income from business’ and not under the head ‘capital gain’ from sale of land and building. The provision of section 50C which deems the sale value adopted for the purpose of levy of stamp duty as the sale consideration is applicable only in relation to Page 2 of 3 completion of capital gain from sale of land and building. This view is supported by the decision of Tribunal in the case of Indralok Hotels Pvt. Ltd.(supra). We therefore, see no infirmity in the order of CIT(A) in deleting the addition and the same is therefore confirmed.’ 4. We have gone through the order for A.Y. 2006-07 and the order of CIT(A) and noticed that the AO has treated the income declared by assessee on account of TDR as income from capital gain as against declared by assessee as income from business. We find that CIT(A) has relied on Tribunals decision in assessee’s own case for A.Y. 2006-07. Hence, we find no infirmity in the order of the CIT(A) and respectfully following the co- ordinate Bench decision in assessee’s own case, we dismiss the Revenue’s appeal.
The Cross Objection is supportive of the order of the CIT(A) and hence as become infructuous and dismissed.
In the result, the appeal of Revenue as well as CO, are dismissed. Order pronounced in the open court on 10-01-2017.