MAHANT MADHAVDAS MAHATYAGI,MUMBAI vs. ACIT RG 24(2), MUMBAI

Assessee by : Shri Vipul Joshi Revenue by : Shri Bhanwar Singh Ratnoo (DR) Date of Hearing : 17/03/2016 Date of Pronouncement : 15/06/2016 O R D E R PER R.C. SHARMA, AM : These are cross-appeals filed by the assessee and the revenue against order of CIT(A) for A.Y 2006-07, in the matter of order passed u/s. 143(3) of the Income Tax Act, 1961. The following grounds have been taken by the revenue in its appeal no. 3022/Mum/2010 : “1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing to take the cost of acquisition of flat @Rs.300/- per sq.ft ignoring the facts of the case that the assessee has not incurred any cost of acquisition of the said flat and received the flats free of cost as compensation in lieu of rent receivable from the developer and was of the nature of revenue receipt as held by the ITAT, Mumbai, in assessee's own case in A.Y.2000-01 vide order ITA.No.3198/Mum/06 dated 09.10.2009.

2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing to assess the rental income, as income from house property as against business income, as rent was received on exploitation of business asset i.e, closing stock.